Ontario Auto Insurance: Can Be Cancelled After Three (3) Small Claims Over Five (5) Years


Financial Services Commission of Ontario

see source

Thieng Ing hasn’t driven his car since December 2010. His insurance policy wasn’t renewed after he made three claims in five years.

None of the claims involved traffic violations or demerit points. The damage reported was less than $20,000 in total.

“Mainstream insurance companies refused to give me a quote,” he said. “And I could not afford high-risk insurers with an annual premium cost of $16,000 to $19,000. I had no choice but to give up driving.”

Angelo Pesce, whom I wrote about on Oct. 19, had a similar story. He filed three claims in five years ($15,000 in total) and was refused renewal by his insurance company.

He, too, gave up driving his car after not being to afford the insurance rates of $15,000 to $19,000 a year he was given.

These cases should make you think twice before filing an insurance claim for minor damage to your vehicle. Is it worth the risk of being cut off by your insurer and falling into the high-risk category?

In the earlier column, I didn’t name Pesce’s company — TD Insurance — because I was waiting for a response. Now I have one.

“While we can’t comment on the specifics of this case, we are confident that the file was handled appropriately,” said Huma Pabani, a TD spokeswoman.

All car insurers have to file their underwriting policy each year with the provincial regulator, Financial Services Commission of Ontario (FSCO).

Among the reasons listed by TD for refusing to renew a client’s contract: Three or more at-fault accidents within the last five years.

Pesce had asked TD to cover damage to his vehicle in his condo garage and at parking lots. If he’d known that single vehicle accidents were deemed to be at-fault accidents, he wouldn’t have filed the claims, he said.

Companies’ underwriting rules are public documents that customers can ask for from their insurers, said Kristen Rose, a FSCO spokeswoman.

Insurers see drivers with two or more at-fault accidents in the last five years as higher risk and may refuse to insure them, she added.

Making small at-fault claims under your comprehensive coverage — say for a broken windshield — can also have consequences. The insurer may require paying a higher deductible or may refuse to sell comprehensive coverage under your policy.

Here’s advice you can take away from both stories: Read your policy. Ask for a copy of the underwriting rules.

Speak to your insurance company, agent or broker to ask questions before making a claim.

Ask about buying an accident protection endorsement, which protects your driving record in the case of a single at-fault accident. Ask if you can pay for your own small claims.

Companies have different policies on accident protection and consumers’ ability to pay for their own small claims, Rose said. So, make sure you know what coverage you have.

Remember, too, that Ontario has at-fault rules that govern how insurers handle a claim.

“Someone is always determined to be at fault in an auto accident, whether partially or fully,” says the FSCO website.

Ing made his third claim (the one that caused his policy not to be renewed) after he saw a driver back up and hit his car in a parking lot.

Only later did he learn that his insurer had assigned half the fault to him and half to the other driver.

“If I’d known that, I wouldn’t have reported the third claim. I learned the hard way,” he said.

It's only fair to share...
Share on FacebookTweet about this on TwitterGoogle+Pin on Pinterestshare on TumblrShare on LinkedInShare on RedditEmail to someone

One thoughtful comment

  1. I know this site presents quality depending articles and additional data, is there any other website which gives such data in quality?

Leave a Reply

Your email address will not be published.