Feb 18, 2020

Are You Up To Date On Ontario Car Insurance Laws?

Every province in Canada has car insurance rules and regulations. Ontario is no different. When shopping for Ontario car insurance, you’ll notice there is a compulsory minimum coverage requirement. There are also a number of car insurance rules you are required to follow.

Here we’ll provide you with a refresher about the most important car insurance rules and laws in Ontario.

Is Car Insurance Required In Ontario?

Ontario car insurance rules

Car insurance is required by law in Ontario. $200,000 in third party liability coverage is mandatory for all drivers. However, it is highly recommended drivers increase liability coverage limits.

A policy with minimum coverage also includes :

Why Is Car Insurance Is Required By Law In Ontario?

Auto insurance is required in Ontario as a means of protection for all drivers. It provides a minimum level of financial protection for those involved in accidents. Without mandatory insurance, some drivers would not have the resources to cover the cost of repairs or healthcare for accident related injuries.

Having mandatory insurance levels the playing field. It ensures the vast majority of drivers have coverage. In some cases, the minimum amount of coverage is not enough. It’s recommended to speak with an insurance professional to set the right coverage limits to meet your driving needs.

A minimum level of auto insurance coverage was established in the Compulsory Automobile Insurance Act, 1990. Minimum requirements have been amended over time to reflect current market conditions.

What If I Drive Without A Valid Ontario Insurance Policy?

It’s estimated that about 2% of all drivers do not have a valid Ontario car insurance policy. Driving without insurance in Ontario is a serious offense. It can result in a hefty fine. They start at $5000 for your first offense and could go as high as $50,000. You are also subject to a driver’s license suspension, vehicle impoundment, and other fees related to your fine. It’s not worth it to drive without insurance.

Proof Of Ontario Car Insurance

All drivers are required to show proof of insurance in Ontario. Also known as your car insurance pink slip, you must carry your insurance card with you when you operate your vehicle. Failure to show proof of coverage could result in a fine.

Electronic proof of insurance is now available in Ontario. This allows drivers to show proof of their policy on a mobile device.

Where Do You Buy Insurance In Ontario?

In Ontario, insurance is sold by private insurance companies. You can buy insurance coverage from a licensed insurance professional. You can purchase coverage directly from an insurance agent that represents an insurer or via an insurance broker. Brokers provide you with more coverage options as they can help you compare policy options from a variety of insurance partners.

Car Insurance Eligibility and Restrictions

Ontario car insurance laws

All drivers must meet a series of car insurance residency rules and criteria to be eligible for car insurance coverage :

  • You must be an Ontario resident.
  • You need to have a valid Ontario driver’s license.
  • Your vehicle is to be used for personal use only.
  • Your vehicle must be safe to drive.
  • You do not have previous fraud convictions.
  • No serious past convictions, claims, or insurance payment issues.

Who Regulates The Ontario Car Insurance Market?

The Financial Services Regulatory Authority of Ontario (FSRA) oversees the auto insurance market. The industry was previously regulated by the Financial Services Commission of Ontario (FSCO). This change took effect on June 8, 2019.

Private insurers set rates and then reviewed and approved by the FSRA. Rates can change quarterly. FSRAO’s mandate is to protect consumers and enforce insurance laws and regulations. The FSRA administers the :

  • Financial Services Regulatory Authority of Ontario Act
  • Insurance Act
  • Compulsory Automobile Insurance Act

Car Insurance Claim Rules

Insurance claims rules vary based on your insurer, coverage, and policy limits. Depending on your claim, you may or may not be covered for certain perils. You are also subject to your policy limits. Follow these claims rules :

  • Be honest.
  • Only make claims for damage that occurred in the specific claim instance.
  • Don’t fake, exaggerate or lie about injuries caused in an auto accident.

Failure to follow claims rules could result in your claim getting denied. You could also have your policy cancelled. Falsifying documents and lying during the claims process can be considered insurance fraud. This is a criminal offense and you could face jail time if convicted.

Car Insurance Cancellation Rules

Learn about Ontario car insurance rules

Your auto insurance provider has the right to cancel your policy. They can cancel it because :

  • Nonpayment issues.
  • You omitted or provided false information in your application.
  • You engaged in fraudulent activities.
  • You’ve committed a crime when driving or engaged in high risk behaviour.
  • Your insurer can also choose NOT to renew your policy.

You also have the right to cancel your insurance policy. If you choose to cancel before your policy expires, you will have to pay a cancellation fee. The fee will depend on your insurer and the terms of your policy.

Top FAQs For Ontario Car Insurance Rules

Still have questions? Here are some more common questions about car insurance rules in Ontario :

What Are My Rights With Car Insurance?

All drivers have certain rights under the Insurance Act. You have the right to buy coverage, to be treated fairly and to change or cancel your policy. You also have responsibilities as an insured driver. You are responsible to show proof of coverage, pay your premiums on time, and provide accurate information to insurers.

Here’s a complete list of your rights and responsibilities under the Auto Insurance Consumers Bill Of Rights.

Can You Be Refused Car Insurance?

Yes. An insurance company can deny you coverage. You have the right to get a written reason why you were denied. But, you have a right to purchase coverage. If you’ve been denied coverage, you can still qualify for high risk coverage or through the Facility Association.

Is There Private Car Insurance In Ontario?

Yes. Ontario uses a private insurance system. Drivers get car insurance through private insurance providers.

Do You Need Insurance To Register A Car In Ontario?

Yes. You must show proof of auto insurance coverage to register any type of vehicle in Ontario. You can use your pink slip or get proof from you insurance provider.

Can You Drive Someone Else’s Car Without Insurance In Ontario?

Yes. Insurance rules for driving other cars are straightforward. You can drive someone else’s car with permission. The other driver must have insurance coverage on the vehicle. Insurance coverage follows the vehicle, not the driver in Ontario.

Who Can Drive My Car Under My Insurance In Ontario?

Your insurance policy follows the vehicle, not the driver. Any driver you permit to drive your vehicle has coverage under your policy. This also means that if the driver gets into an accident, the claim will go on your insurance record.

What Is The Ontario Auto Insurance Database?

Ontario’s Insurance Validation Program (IVP) keeps track of the vehicle VIN numbers and the insurance coverage status of the vehicle. It is maintained by the Insurance Bureau of Canada.

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