ONTARIO
AUTO INSURANCE
FREQUENTLY ASKED QUESTIONS
Q
Q
C A R INSUR ANCE VISIT I B C.C AIntroduction
3
Applying for auto insurance
4
• What do I need to know to fi ll out an automobile insurance application? 4 • What is the impact of inaccuracies or omissions in applications for automobile insurance? 5
• Why is it important to pay premiums on time? 5
• What should I know about a lapse in insurance coverage? 6
• What coverage is mandatory and what coverage is optional? 7
• How do deductibles work? 9
Establishing a premium
10
• What infl uences my premium? 10
• How can I get a premium discount? 10
• How do claims aff ect my premium? 11
• How do convictions aff ect my premium? 11
If I have to make a claim
14
• What do I do if I am in an automobile collision? 14
• What should I know about fi ling an insurance claim? 16
• What is no-fault insurance all about? 17
• How do accident benefi ts work? 19
• What happens when a vehicle is a “total loss”? 20
• Why is my car not always repaired with new parts? 20
After the claim
21
• Ontario Mandatory Vehicle Branding Program:
What happens if my vehicle is severely damaged? 21
Driving in the United States
23
With appropriate acknowledgement, this publication may be reproduced and used in whole or in part, provided such reproduction is intended for personal or educational use and not for monetary gain of any kind. In all written or spoken references to this information, please include “Information provided courtesy of Insurance Bureau of Canada.”
Introduction
Every year, information offi cers at Insurance Bureau of Canada’s Consumer Information Centres answer tens of thousands of questions from insurance policyholders across the country. At the Ontario Consumer Information Centre, many of these questions are about automobile insurance.
Automobile insurance is complex. As a consumer, you should examine your policy carefully. Few people bother to read their policy until they are involved in a collision, a car they own is broken into, or they have some other problem.
When shopping for auto insurance, remember that the wording of your policy will be the same no matter which insurance company issues it because the Ontario Automobile Policy and related endorsements (endorsements are add-ons to basic coverage) are forms approved by the Financial Services Commission of Ontario (FSCO). However, not all companies provide all the endorsements. Your insurance representative can help you decide what coverage is best for you.
In this publication, we have done our best to answer the questions most oft en asked about car insurance in Ontario. If you have other questions or need more information, please call us or visit our website. Th e Consumer Information Centre can also help you with your home and business insurance.
CONSUMER INFORMATION CENTRE
Monday through Friday between 8:00 a.m. and 5:00 p.m. In Toronto: 416-362-9528
Elsewhere in Ontario: 1-800-387-2880 Fax: 416-644-4961
Applying for auto insurance
What do I need to know to fi ll out an automobile insurance application?
Here is some of the information you will need to provide on an automobile insurance application:
1. Vehicle information
• Year, make, model, body type, number of cylinders or engine size, gross vehicle weight rating.
• Vehicle identifi cation number, or VIN (serial number).
• Estimated annual driving distance.
• Lienholder’s name and postal address (the person or group you are still making payments to if your car loan is not paid in full). • Automobile use, including pleasure, business,
driving to work.
2. Driver
information
• For each driver – name, driver’s licence number, date of birth, date fi rst licensed in Canada, other classes of licence (if any), the percentage of time each driver uses the vehicle(s).
• Whether you or the other drivers have driver training. If so, the training certifi cate(s) need(s) to be attached so that you and the other drivers can be considered for premium discounts.
• Whether anyone else in the household or business is licensed to drive. If so, details need to be provided in the remarks section of the application.
• Whether any driver’s licence, vehicle permit, etc., issued to you or any person in the household or business has been suspended or cancelled in the last six years.
• Whether any insurance company cancelled automobile insurance for you or any driver listed on the application in the last three years. • Whether any automobile insurance policy
issued to you or any listed driver has been cancelled or any claim has been denied for material misrepresentation (not telling the truth) in the last three years.
• Whether you or any listed driver has been found by a court to have committed a fraud involving automobile insurance.
3. Previous collisions, insurance claims and driver convictions
• You must disclose details about all collisionsor claims on any automobile of any listed driver during the last six years.
• You need to provide details of the date of claim, type of claim, amount paid or estimate of damage and other details. If you need help, contact your insurance representative before completing the application.
• You need to provide details of all convictions you and any listed drivers received arising from the operation of any automobile in the last three years. If you do not know or are unsure of conviction dates, ask your insurance representative.
What is the impact of inaccuracies or omissions in applications
for automobile insurance?
Th e information you give on an application for automobile insurance is the basis for calculating the premium required and terms and conditions of the policy, if one is issued.
Th e Superintendent of Financial Institutions at FSCO approves the wording of automobile insurance applications. Th e application contains a declaration where you confi rm that the answers to questions about you and all the other drivers of the insured automobile in the household or business are correct. Th ere is also a warning about the possible consequences of leaving things out or not telling the truth – in other words, errors or omissions in your answers.
When you sign an application, you are confi rming the accuracy and completeness of the information in that application. Even if your answers are written on the form by someone else, the responsibility for the answers is yours. Discussions between you and the person completing the form are not part of your application unless the written answers include that information.
While the insurance company may be able to check the accuracy, you must give complete, accurate answers. Inaccuracies or omissions may mislead the insurance company. As a result, your insurance could be invalid (you lose your right to recover a loss) or your policy may be cancelled.
A cancellation of your policy because of
misrepresentation generally results in you paying more for any policy you are able to get later. Ask your insurance representative to explain the current driving and conviction information shown on your existing policy.
When you sign the application, you authorize the insurance company to collect, use and disclose your driving record, auto insurance history and auto claims history, and the record and history of any listed drivers.
Why is it important to pay premiums on time?
Your premium is due as soon as it is billed by your insurance representative, and you should send it promptly. If you are having problems paying on time, you must discuss the situation with your insurance representative before your account becomes “delinquent.” Oft en, additional payment time can be arranged or an alternative payment method may be off ered. Do not ignore the situation or you may fi nd yourself driving without insurance, which is a serious crime.
If your insurance representative or insurance company is not paid and is unable to get a response from you or to reach you, they have no choice but to cancel your policy by providing cancellation notice either by hand delivery or registered mail. Your insurance company can cancel your policy for non-payment subject to providing you 15 days’ notice in person or 30 days’ notice via registered mail. In cases of repeated non-payment, your insurance company can cancel your policy by providing you fi ve days’ notice in person
If you do not want to renew a policy, notify your insurance representative promptly. Some people believe that if they have arranged insurance elsewhere they do not need to notify the previous insurance representative. Th is is not so! Your policy will be cancelled for non-payment of premium. Th is cancellation will be a “black mark” against your insurance record, and your future premiums may be higher as a result.
If you pay your premium with a series of postdated cheques or by pre-authorized bank withdrawals, make sure the money is in your account, ready for transfer to the insurance company. If you do not have enough money in the account and the insurance company cancels your policy, you cannot assume your coverage will automatically be reinstated later on.
What should I know about a lapse in insurance coverage?
A lapse in insurance coverage will not be held against you unless:
You operated or caused or permitted the operation of the automobile without auto insurance during the lapse in coverage.
Your policy was cancelled for non-payment of premium.
Your driver’s licence was suspended because of a conviction related to the use or operation of the automobile, e.g., impaired driving.
You did not inform the insurer of a collision or conviction.
When you want insurance coverage at a later date, you may need to prove you had prior insurance. You can obtain a letter from your insurance representative outlining your current policy number, insurance company, how long you were insured and your collision and conviction history.
A letter can be provided by your insurer if you are going to cancel your policy for any of the following reasons:
You have sold your car and do not plan to replace it for a while.
You will be moving out of the country temporarily.
You are going to drive a company car and will not need your own vehicle.
Alternatively, you can write down the reason for a lapse in insurance and make two copies. Give one to the insurance representative and ask him or her to sign the other copy for your records. Th is provides you with documentation when you need insurance again, in case that broker/agent is no longer available to verify your lapse in coverage. Also keep a copy of your latest policy.
What coverage is mandatory and what coverage is optional?
Automobile insurance is required by law in Ontario. You must not drive without it.
While the law calls for standard policy wordings and oversees the range of options, there are many insurers competing for price and service in the Ontario market. Brokers and agents can tell you which insurers they represent and which companies they get quotes from, and show you those prices on request.
MANDATORY coverage
To drive in Ontario, you must have direct compensation – property damage (DCPD) coverage, uninsured automobile coverage, liability – bodily injury coverage, and accident benefi ts coverage. Th ese are all compulsory. Th is means that, by law, you must buy these types of coverage.
Type of
Coverage
What the coverage does
Minimum or
limit requirements
Liability –Bodily Injury
Protects you if someone else is killed or injured or their property is damaged. It will pay for legitimate claims against you up to the limit of your coverage and will pay for the costs of settling the claims.
$200,000 (higher limits are recommended).
Accident Benefi ts Provides benefi ts if you are injured or killed in an automobile collision anywhere in Canada and the United States regardless of who caused the collision. Th ese benefi ts may include:
• Income replacement.
• Payments to non-earners who suff er a complete inability to carry on a normal life.
• Care expenses to persons who cannot continue as a primary caregiver to a member of their household. • Medical, rehabilitation and attendant care expenses. • Certain other expenses.
• Funeral expenses.
• Payments to survivors of a person who is killed.
Th e details of the accident benefi ts are set out in the Statutory Accident Benefi ts Schedule of the Insurance Act of Ontario, and are also available on Insurance Bureau of Canada’s website at www.ibc.ca.
Uninsured Automobile
Protects you if you are injured or killed by an uninsured motorist or hit-and-run driver to the extent that you were not at fault.
Covers damage to your automobile caused by an identifi ed uninsured motorist. $200,000 limit. Up to $25,000, subject to a deductible of $300. Direct Compensation – Property Damage (DCPD)
Allows you to claim for damage to your vehicle and its contents caused by someone else. DCPD means that, to the extent that you are not at fault in a collision with another vehicle, your own insurer will pay for damage to your vehicle and its contents.
$0 deductible (optional deductible of $300 or $500 can be selected).
OPTIONAL coverage
You are not required by law to purchase collision or comprehensive coverage. However, if you owe money on your vehicle, your lienholder (the person or group you are making payments to if your car loan is not paid in full) may require you to have these types of coverage to protect their interest in your vehicle.
Type of
Coverage
What the coverage does
Minimum or limit
requirements
Collisionor Upset
Pays for damage to your vehicle to the extent that you are at fault or for damage caused by an unidentifi ed vehicle or object.
Th e standard deductible is $500 for collision or upset and $300 for comprehensive; however, you may choose a higher deductible in order to decrease your rates. Comprehensive Pays for all insured damage to your vehicle except for collision
damage (e.g., pays for fi re, theft and vandalism).
All Perils Th is coverage combines collision and comprehensive. It is the broadest coverage available and it includes all types of coverage unless specifi cally excluded.
Specifi ed Perils Pays only for losses caused by perils specifi cally listed in the policy (primarily fi re and theft ).
Increased Liability
You may buy coverage beyond the minimum required by law to $1 million or $2 million.
Increased Accident Benefi ts
You may buy coverage beyond the minimum required by law. Th e optional benefi ts your insurance company off ers are:
• Increased income replacement.
• Caregiver, housekeeping and home maintenance. • Increased medical, rehabilitation and attendant care. • Increased death and funeral.
• Dependant care.
Endorsements
In addition to the types of coverage listed above, you may purchase a number of enhancements to your insurance policy (known as “endorsements”). Th ese are the six most common endorsements:
Rented or leased vehicles (OPCF 5) – Extends coverage to a vehicle you drive that is owned by a leasing company.
Loss of use (OPCF 20) – Pays for a rental vehicle if your vehicle is being replaced or repaired as a result of damage or loss caused by an insured peril. Ask your agent or broker for the limit applicable to your policy.
Liability for damage to non-owned automobile(s) (OPCF 27) – Provides legal liability protection for physical damage to a vehicle that you, your spouse or any listed driver operates but does not own, such as a rented or borrowed vehicle.
Removing depreciation deduction (OPCF 43) – Removes your insurer’s right to deduct depreciation from the value of your vehicle when covering damage or loss to your vehicle from an insured peril.
Family protection coverage (OPCF 44R) – Protects you or an eligible family member to the same limits as your own third-party liability coverage if you or an eligible family member are involved in an automobile collision where the at-fault party is inadequately insured to cover the claims. When you fi ll out your application for automobile insurance, you have to indicate whether or not you want this coverage.
Added coverage to off set tort deductibles (OPCF 48) – Reduces the deductible associated with court-awarded compensation for pain and suff ering from $30,000 to $20,000 and for Family Law Act claims from $15,000 to $10,000.
Th ere are many other endorsements available that are less common but may be of benefi t to you. Your insurance representative will be familiar with all of them and will advise you if any would be of benefi t to you.
How do deductibles work?
A deductible is the part of a claim that you must pay yourself. Higher deductibles usually mean lower premiums but higher fi nancial risk.
Under the DCPD provisions of your policy (see Mandatory Coverage on p. 7), if you are not at fault for a collision (in Ontario, involving another Ontario insured vehicle) under the standard Ontario policy, there is no applicable deductible. However, you can select an optional deductible of $300 or $500. Th e amount of the deductible to be applied in these circumstances would be adjusted to refl ect the apportioned percentage of fault.
If you have bought optional coverage for collision or upset, and if you are fully at fault for the damage to your vehicle, the full amount of the deductible applies. If you are claiming for losses unrelated to a collision (hail dents, for example) your full deductible applies, except in the case of fi re or lightning, for which no deductible applies.
Establishing a premium
What infl uences my premium?
Automobile premium levels are aff ected by many factors, such as:
Th e ways you use your vehicle. (Do you use your vehicle just for pleasure? Do you drive to work or use your car for business?)
Th e type of vehicle you drive.
Th e year, make, model and body type of your vehicle.
Th e approximate number of kilometres you drive your vehicle annually.
Th e listed drivers of your vehicle.
Th e age and driving experience of each driver in the household. (Are any drivers under age 25? Are they male or female?)
Th e amount of time each driver will be using the vehicle.
Th e claims and collision history for each driver over the last six years.
Each driver’s conviction record for the last three years.
Whether any driver in the household has had a licence suspension within the last six years or an automobile insurance policy cancelled in the last three years.
How can I get a premium discount?
Discounts vary by company. Ask your insurance representative which ones apply to you. Th e following is a list of some types of premium discounts that may be available.
Some companies off er discounts for using your car infrequently (low mileage use), for graduating from an approved driver training course, or for volume when two or more vehicles are insured for the same household.
Retirees with no employment income receive a discount. Some companies provide other discounts to mature drivers over age 55.
You may be eligible for a discount if you choose to insure your home and car with the same company.
Some companies provide an extra discount when renewing policies for long-time customers who are claims-free.
You may get a discount if you install loss-prevention devices, such as a car immobilizer.
If your car is not used in winter, speak to your insurance representative about arranging an agreement of suspension of coverage endorsement (OPCF 16). Th is suspends coverage in relation to the use or operation of the vehicle but maintains coverage associated with the ownership of the vehicle (e.g., DCPD in case your car gets struck by another vehicle while parked) as well as accident benefi ts in case you, your spouse and/or any listed drivers are in a collision as occupants in an automobile you do not own or are struck by an uninsured automobile.
Increasing your deductibles could give you a lower premium.
How do claims aff ect my premium?
If you are at fault or partially at fault in a collision, your renewal premium may be aff ected. If you lend your car to others and they cause a collision, your premium may be aff ected.
Numerous at-fault claims and/or driving convictions could result in you being transferred to the higher-premium insurer, Facility Association, at renewal time.
Some types of claims do not aff ect your premium. For example, claims where you were 25% or less at fault do not aff ect your premium. In addition, some companies allow one at-fault claim, regardless of percentage at fault, for clients believed to be good drivers, with little or no adjustment in rating or premium at renewal. Claims for theft , vandalism, fi re, broken glass and collision (when you are not at fault) do not aff ect your renewal premium.
How do convictions aff ect my premium?
Driving convictions may aff ect your rating in several ways depending on the number and type. Premium
calculations vary by company. Contact your insurance representative if you are concerned about how a conviction will aff ect your renewal premium.
To be eligible for preferred rating plans, such as “six star,” you must have a clear record or no more than one or two minor driving convictions (requirements vary by insurance company). Additional convictions usually result in the loss of your preferred status and discounted premiums. So, in addition to the police fi ne, your insurance costs can increase.
Insurance companies may also levy a premium surcharge if you have several minor driving off ences or one of the more serious off ences under the Criminal Code of Canada or the Highway Traffi c Act. Surcharges vary by company but many use the Facility Association rules as a guideline.
Th e following are examples of premium surcharges the Facility Association applies on private passenger vehicles:
Minor Major
Serious
One conviction 0% Two convictions 5% Th ree convictions 15% Four convictions 25% Each additional 15% One conviction 15%
Each additional conviction 25%
One conviction 100%
Each additional conviction 100%
What constitutes a minor, major and serious off ence?
Minor Major
Serious
Th is list of minor convictions is not all-inclusive. Other moving violations, including new off ences under an act governing highway traffi c, may be considered minor, whether committed within or outside Canada, if not specifi cally named in the major or serious list.
• Failure or refusal to surrender licence (Compulsory Automobile Insurance Act)
• Failure to produce evidence of insurance (CAIA)
• Failure to carry insurance card (CAIA) • Failure to carry evidence of insurance
(CAIA)
• Failure to have insurance card (CAIA ) • Failure to disclose particulars (CAIA ) • Failure to notify police
• Failure to make written report
• Backing up – unsafe/illegal/improper – any type
• Brakes – none/inadequate/improper – any type
• Crowding driver’s seat
• Door opening – illegal/obstructing traffi c – any type
• Emergency vehicle – operating with no regard for safety • Driving imprudently
• Driving off roadway – shoulder/ sidewalk/median) – any type • Disobeying fl agman/woman • Following too closely –
including tailgating
• Using a hand-held wireless communication device • Headlights/parking lights –
improper/lack of use – any type
Convictions for any of the following off ences under any act governing highway traffi c or under the Compulsory Automobile Insurance Act (CAIA), or under the Motor Vehicle Accident Claims Act (MVACA) or for any off ence substantially the same committed within or outside Canada:
• Failure to report damage to highway property • Failure to stop on request
of or to obey directions of a police offi cer
• Failure to report a collision • Failure, in the event of a
collision, to give name and licence number to the police or any other person entitled to such information
• Failure to obey school crossing stop sign • Improper passing of a school bus • Improper passing/speeding in a school or playground zone • Stunting
• Producing false evidence (CAIA)
• Making a false statement regarding insurance (MVACA)
• Producing false insurance (MVACA)
• Making a false statement (CAIA)
Convictions for any of the following off ences under the Criminal Code of Canada or under an act governing highway traffi c or under any other act or for any off ence substantially the same whether committed within or outside Canada or any conviction that appears on a driver record abstract as a Criminal Code conviction:
• Speeding 50 kph or more over the speed limit • Driving without
insurance
• Operating motor vehicle – no insurance (CAIA) • Criminal negligence committed in the operation or use of a motor vehicle • Manslaughter committed in the operation or use of a motor vehicle • Driving while licence
under suspension • Racing
• Careless driving
• Driving without due care and attention
• Driving without an interlock device where its installation is a requirement for licence reinstatement
• Dangerous driving • Impaired driving
• Lack of control of vehicle – any type • Motor-assisted bicycle – carrying
passengers
• Motorcycle – operating with only an instruction permit
• Motorcycle – failure to wear helmet • Passing infraction – any type except
school bus or school/playground zone • Pedestrian crossing violation – any type • Radar warning device in motor vehicle
– if illegal in province/territory • Railway crossing violation – any type • Safety zone violation – any type • Seatbelt violation – any off ence • Signalling off ences – any type • Slow driving – endangering others –
any type
• Smokescreen device on vehicle • Speeding – any type, except when
listed as major or serious • Squealing tires
• Stopping – illegal/improper – any type • Tires – defective/worn – any type • Towing – prohibited/unsafe – any type • Traffi c signals/regulating lights –
disobeying – any type
• Traffi c signs – disobeying any legal sign except parking regulations
• Trailer – improper attachments/ improper towing
• Turns – illegal/improper – any type • Unlicensed driver – any type including
improper licence class • Unsafe move
• Unsafe vehicle – any type
• Wrong side of road/wrong way – any type
• Failing to yield – any type including failing to yield to a public bus
• Ontario Graduated Licence –
- permit novice driving in contravention of conditions/restrictions - class G1 accompanying
driver – fails or refuses to provide a breath or blood test
- class G1 accompanying driver has excess blood alcohol
- class G1 driver unaccompanied by qualifi ed driver
- class G1 driver with front seat passengers
- class G1/G2 driver with excess passengers - class G1 driver on prohibited highway - class G1/M1 driver at unlawful hour - class M1 driver on motorcycle with passenger - class M1 driver on motorcycle on prohibited highway • Failure or refusal to submit to a breath or blood test
• Failure to pass a breath or blood test
• Failure to stop/remain at the scene of a collision • Class GI/G2/M1/M2 fail/
refuse breath sample • Class G1/G2/M1/M2
driver with alcohol in blood
Note: If convictions for impaired driving and failure or refusal to take a breath or blood test relate to the same occurrence, they will be considered as one conviction.
If I have to make a claim …
What do I do if I am in an automobile collision?
At the scene
• Stop. Failure to do so may result in criminal prosecution.
• Stay calm.
• Off er help to anyone injured.
• If the collision is an emergency, call 911 and follow instructions. Use 911 for emergencies only! In Ontario, all collisions resulting in injury or property damage of more than $1,000 must be reported to the police.
• Move vehicles out of traffi c, if possible. Do not drive the vehicle unless it is safe to do so. If you cannot drive the vehicle, turn on your hazard lights or place cones, warning triangles or fl ares around the vehicle.
• If no one is injured and the total property damage is estimated to be less than $1,000, call local police for instructions. Police may or may not be dispatched to the collision. A number of locations have special programs in place to deal with vehicle collisions. Toronto, for example, has Collision Reporting Centres where collisions must be reported in person within 24 hours if police did not attend the collision scene. Find out what is required in your area, and keep this information in your glove box.
• Record details of the collision – how, when, where it happened, time, date, location, speed, weather and road conditions.
• Draw a sketch of the collision scene showing the position and direction of the vehicles and the cross streets.
• Keep a camera in your vehicle and take photos of the damage to your vehicle and the damage to the other vehicle(s). Th is can be helpful if someone is trying to claim other damage or there is a dispute about what happened. • Answer police questions honestly but make no
comments or admit any blame for the collision. Your insurance company will determine fault, based on the Fault Determination Rules established by the Ontario government. • Note the badge numbers of the investigating
offi cers if police attend the scene.
• Get names, addresses, telephone, driver’s licence and plate numbers, and insurance details from everyone involved.
• Get names, addresses and telephone numbers from witnesses when possible. It is also helpful to jot down licence plate numbers of other vehicles if you think someone in them might have seen the collision, but with moving traffi c this may not be possible.
• Be careful of tow truck operators pressuring you to authorize towing or repairs at the scene. You have the right to request estimates of fees in advance. If you feel you are being pressured, ask police for the name of an authorized tow truck operator and have your vehicle towed to the police compound or your driveway until you talk to your insurance company.
After the collision
• Report the collision to your insurance
representative as soon as possible. He or she will explain the coverage provided by your automobile policy and start handling your claim.
• If you are injured in the collision, your company will provide you with a package of accident benefi ts claims forms, which must be completed and signed to start your benefi ts.
• You are responsible for protecting your vehicle from further loss or damage. You must not authorize repairs, other than those needed for protection of the vehicle from further loss or damage, until the insurer has consented or has a reasonable amount of time to inspect the damage and consent.
• Many insurance companies have a list of preferred body shops that will complete proper repairs to your vehicle. Your insurance adjuster or broker/agent can assist you with fi nding a good one in your area.
• Your insurer will usually pay the lower of the cost to repair the loss or damage or the actual cash value of the vehicle at the time it was damaged. Your insurer makes the decision to repair, replace or rebuild your vehicle, or pay for the damage. Th e Ontario Automobile Policy entitles you to have repairs done with parts of similar kind and quality. In other words, your car should be repaired so it is in a condition approximately the same as it was prior to the collision.
Reporting a collision to the police
Th e Highway Traffi c Act requires any person involved in a car collision to:• Report the collision to the nearest police offi cer; • Remain at or immediately return to the scene for
the purposes of off ering assistance when needed; and
• Upon request, provide the name, address, driver’s licence number and jurisdiction of issuance, motor vehicle liability insurance policy insurer and policy number, and the name and address of the vehicle’s registered owner to a police offi cer, to any person sustaining loss or injury in the collision, or to a witness to the collision.
By law, all collisions must be reported to the police if there are any personal injuries or deaths, and where the damage to all vehicles is more than $1,000. You are required to report such collisions to the insurance company within seven days. If you are unable to report within the seven days, report it as soon as possible.
Th e penalty for failing to report a collision and/or failing to provide the necessary information is a fi ne of $400 to $2,000, three demerit points, a possible jail term and driver’s licence suspension. Th e penalty for leaving the scene of a collision includes seven demerit points.
Th e police are required by law to investigate all reported motor vehicle collisions and to provide a report to the Registrar of Motor Vehicles (Ontario Ministry of Transportation).
What should I know about fi ling an insurance claim?
What are the accident benefi ts to which I am entitled?
If you are injured in an automobile collision, you may be entitled to a variety of benefi ts. A full description of provided coverage is contained in the regulation commonly known as the Statutory Accident Benefi ts
Schedule. A copy of this document is available on request from your insurer. Your insurer will provide you with the necessary claim forms and will help you complete them.
Getting your damaged vehicle repaired
If your vehicle is damaged but repairable (and you have the necessary coverage in your policy), your insurer may suggest the repairs be carried out by one of their preferred shops. If this is done, it will be the responsibility of the insurer to make sure the work is done satisfactorily. You may, if you wish, have the work done by a repair shop of your choice. However, be aware that the insurer will not pay any more than the price quoted by their repairer. Also, if the work is
unsatisfactory, it will be your responsibility to deal with the repair shop.
If the damage is major and cannot be repaired safely, or the cost of repairs is more than the value of the vehicle before it was damaged, the insurer may decide to write off the vehicle. Th ey will negotiate a settlement with you based on the actual cash value of the vehicle at the time of the collision and will keep the salvage.
“Betterment”
When an insurer is paying for a vehicle to be repaired, the shop will replace damaged parts with parts of the same vintage as the car. For example, the damaged bumper of a 1994 car would be replaced with a 1994 bumper. If new parts are used as replacements even
though used parts are available, the value of the car may be increased. In such a case an amount will be calculated, known as “betterment,” representing the increase in value, and you may be asked to contribute to the cost of repairs.
What is covered if my vehicle is broken into?
Criminals fi nd it profi table to steal and sell automobile equipment and accessories. Th is type of loss is covered as an add-on to your automobile policy if you have bought all perils, comprehensive or specifi ed perils coverage.
However, your personal property in the vehicle, such as audio disks (except for those in the machine), briefcases, suitcases, golf clubs, skis, bikes, fi shing equipment and so on, is not covered under the automobile policy. Coverage for these things is provided with your homeowner’s, tenant’s or condominium insurance.
You may have to pay two deductibles. Th ere is a deductible for the automobile policy (except in the case of fi re or lightning). Your homeowner’s/tenant’s/ condominium policy has a separate deductible. If you leave the keys in the car or leave it unlocked, the vehicle itself (and its accessories) will be covered under your automobile policy. As for the contents, some homeowner’s, tenant’s and condominium policies require visible signs of forced entry into a locked vehicle as a policy condition. Contents claims from an unlocked vehicle would not be covered by automobile insurance policies.
Locking bikes or skis in your vehicle
Th e trunk of a full-size car can accommodate a bicycle if you take the front wheel off . Some cars have a special
insurance representative about scheduling your sports equipment, cameras and other vulnerable items with
What is no-fault insurance all about?
It does matter who caused the collision.
You certainly cannot be blamed for being confused about the term “no-fault” insurance – it is a commonly misunderstood term. No-fault insurance does not mean the insurance company lets you off the hook if you cause a collision. Despite the misleading name, it
does matter who caused the collision, and if you are found to be at fault, either completely or partially, it will go on your insurance record. Th at means you may experience an increase in your future premiums.
You deal with your own insurance company.
No-fault insurance really means that if you are injured or your car is damaged in a collision, you deal with your own insurance company, regardless of who is at fault. You do not have to go aft er the at-fault driver for vehicle damage reports or for the health care and income replacement benefi ts to which you are entitled.
For example, if you are injured in a car collision, you would ask for any medical benefi ts off ered under your policy immediately from your insurer, no matter who is to blame for the collision. Th us, you can get the help you need right away, instead of having to wait for the insurance companies to decide who was at fault before paying any benefi ts.
How does an insurance company assess fault?
Someone is always determined to be “at fault” in an automobile collision, whether partially or fully. Insurance companies must determine the degree of fault to be assigned to each driver so they can adjust at-fault drivers’ premiums. In Quebec and Ontario, charts or rules are used to determine fault. In Ontario, the Fault Determination Rules are found in the Ontario Insurance Act.
Th e Fault Determination Rules contain examples of common types of collisions and explain how to assign fault for insurance purposes. Th ey help insurance companies handle claims promptly and to be fair and consistent. Aft er you report a collision to your insurer, your company investigates the collision and then makes a fault decision based on these rules. Th e Fault Determination Rules:
Cover more than 40 collision situations, using diagrams to show specifi c situations.
Can be applied to almost every possible collision scenario.
Apply regardless of road or weather conditions, visibility, point of impact on the vehicles or the actions of pedestrians.
May fi nd you or the other driver wholly or partially at fault.
If the circumstances show that more than one driver was negligent (or at fault), both drivers’ insurance companies may become involved in the settlement, based on the degree of responsibility connected to each driver. If there is a dispute about responsibility, it may be necessary to go to court to resolve it.
Visit IBC’s website to download a copy of Ontario’s Fault Determination Rules at http://www.ibc.ca/en/ Car_Insurance/documents/brochure/ON-Fault-Determination-Rules.pdf.
How do police charges or convictions aff ect an insurance company’s decision?
If police do not fi le charges, it does not mean that the insurance companies investigating the collision will not fi nd one or more of the drivers involved at fault. For example, if a vehicle was unable to stop on an icy road and rear-ended another, a police offi cer may not charge either driver. Th is should not be taken as an
opinion about how fault applies to an auto insurance claim. In a case like this, the insurer would apply the rule stating that any vehicle that rear-ends another is deemed to be at fault. However, with certain types of charges, the Fault Determination Rules do not apply. In those cases, fault is determined according to the ordinary rules of law.
Can fault in an automobile collision be shared?
Yes. Circumstances may show that more than one driver is partially at fault for insurance purposes. Fault is allocated to each driver based on the collision scenario in the Fault Determination Rules that most
closely resembles the collision. If a collision is not described by any of the scenarios, then fault is allocated according to the rules of law.
Why do I need witnesses if I am involved in a collision?
It is important to get independent witnesses, if possible, to support your version of the events that led to the collision.
Will my rates go up if I am not at fault for the collision?
No. Your rates will not go up if you are 25% or less at fault for the collision. However, if you are over 25% at fault, it may aff ect your rating.
Can I recover my deductible when I am not at fault?
No. You are responsible for paying the deductible regardless of fault. However, in cases involving an uninsured automobile, your insurance company may pursue the owner of the uninsured automobile and
attempt to obtain a judgment against him or her to recover the claim and your deductible, but this could take time.
How does an at-fault collision aff ect me?
You can be deemed anywhere between 0% and 100% at fault.
If you are found more than 25% at fault for the collision, your premium may go up on renewal. However, some companies allow you to maintain your driving record or premium aft er your fi rst at-fault collision. To confi rm your company’s approach and how your rates will be aff ected, ask your insurance representative.
In many cases, if you have your fi rst at-fault collision aft er six or more years without any claims or
increase by only a small amount. Most companies will change your driving record to refl ect the collision. You will then need six years of collision-free driving before you go back to a clean slate.
If this is your second at-fault collision in the last six years, you can expect your premiums to increase quite signifi cantly.
If you have any convictions or cancellations of a policy, in addition to an at-fault collision, or are an inexperienced driver with an at-fault collision, you may be considered a high-risk driver and need to fi nd
When you are shopping for insurance, always ask the insurance representative how your premium will be aff ected aft er an at-fault collision.
In addition, remember that when you lend your car to someone, you are also lending him or her your
insurance. If the individual you lent your car to has an at-fault collision with your car, the collision will go on your insurance record and your insurance premium could go up.
What can I do if I disagree with my insurance company’s assessment of fault?
If you do not agree with your insurance company’s decision and believe the decision does not accurately refl ect the circumstances of the collision, speak to the claims adjuster handling your fi le. Ask which Fault Determination Rule was applied in your case. Bring any new information to your insurance
company. Generally, an insurance company will revise or reconsider its decision on fault only if additional relevant information is provided. For example, if a
collision occurred in which each driver stated the other had gone through a red light, an insurance company would have little choice but to assign 50/50 fault. However, if an eyewitness confi rmed which driver went through the red light, an insurance company could review its decision. If your insurance company refuses to revise its decision and you still disagree, contact your company’s complaint offi cer. He or she will guide you through the company’s complaint-handling procedures.
What are my rights if I drive without insurance and I am in a collision in Ontario that is not my
fault? Can I sue the at-fault driver and recover my losses from his or her insurer?
If you drive without insurance, the Ontario Insurance Act takes away your right to recover any loss or damage from bodily injury or death from the other person. Th e act also takes away your right to recover damage to the vehicle or its contents from the other person.
If you are at fault, the other person’s insurance company can sue you to recover the amounts they paid out. “No-fault” does not mean no blame. Your best bet is to drive safely. No one can fi nd fault with that.
How do accident benefi ts work?
Accident benefi ts are required by law in every province except Newfoundland and Labrador, where this coverage is optional. To encourage fairness, consumer choice and aff ordability, your automobile policy off ers basic coverage with options to purchase increased limits and additional types of coverage.
With basic coverage, policyholders who do not want the higher benefi t limits should fi nd insurance more aff ordable. Only policyholders who require or desire higher limits pay higher premiums for more coverage. Under certain circumstances, legislation allows
innocent victims of vehicle collisions to sue the at-fault driver for pain and suff ering and loss of income and future earnings when the victim’s accident benefi ts are felt to be insuffi cient. A pain and suff ering lawsuit is allowed only if the person’s injuries meet the legislated verbal threshold, meaning the injured person dies or
sustains a permanent and serious disfi gurement and/ or impairment of an important physical, mental or psychological function. Th e court is directed to assess damages and then to deduct $30,000 ($15,000 for a Family Law Act claim).
Also, an injured person whose injuries meet the legislated verbal threshold may sue for 70% of gross income loss before trial (subject to a seven-day deductible), 100% of gross income aft er trial, and medical, rehabilitation and other related costs.
Note: Ontario insureds involved in collisions outside of Ontario anywhere in Canada or the United States can choose to receive, from their own insurance company, the Ontario benefi ts or the equivalent of the benefi ts available to residents of the jurisdiction where the collision occurred.
What happens when a vehicle is a “total loss”?
A vehicle is a total loss when repairs cannot be economically or safely carried out; for example, when repairs would cost more than the actual cash value of the car.
Actual cash value is the amount necessary to replace your vehicle with a comparable used vehicle. Mileage, condition of the vehicle, equipment and average retail selling price are all considered in determining the amount to be paid on the claim.
Your insurance company calculates the vehicle’s actual cash value including HST, where applicable, and off ers you a cash settlement. It is your responsibility to purchase a replacement vehicle.
From time to time, people believe they have not been off ered a fair settlement. An individual can be better informed about what is a fair settlement by doing some research. Check with your local newspapers to see the asking price of similar vehicles. Car dealers and automobile trade magazines are also excellent sources for comparative pricing. Select fi ve prices of cars similar to yours then take the average. You should now have a reasonable ballpark fi gure.
Also, if you have completed work on your vehicle that would increase the selling price, tell your insurance company and provide receipts to help them in
determining your cash settlement. Repairs needed to maintain your car in good running order may not increase the selling price of your vehicle. For example, if you needed new brakes to operate your vehicle, it would not increase the selling price because the purchaser would expect the brakes to be working properly. However, an opinion from the person who regularly services your car on the condition and retail value is helpful. It is preferable to get this opinion in writing.
If, aft er you have done your homework, you still disagree with the cash off er, go back to your claims representative and discuss the matter. Advise him or her of the information you have gathered and ask how the amount was determined by the company. If there is still disagreement, discuss the matter with your insurance representative and inquire about taking the matter for an appraisal to be settled.
Under the Insurance Act, you can make a written request for an appraisal and your insurer will be obliged to participate. Although your insurer may request your participation in an appraisal, you can choose whether or not to participate. Under this process, each side will select an appraiser. Th e appraisers will try to agree on a value but if they disagree, they will appoint an umpire to make a fi nal decision.
Why is my car not always repaired with new parts?
Sometimes your car is repaired with new parts, but not always.
Th e policy or contract you signed with your insurance company calls for repairs with parts of “similar kind and quality.”
If your vehicle is in its fi rst production year, there will likely only be original equipment manufacturer (OEM) parts available to complete repairs. Th ese parts are new, of course.
New parts may also include aft er-market replacement parts. Aft er-market parts can be an over-run from
market parts approved by the Certifi ed Automotive Parts Association meet or exceed OEM specifi cations and are suitable replacement parts.
Regardless of the age of your vehicle, most insurance companies will insist that safety-related parts required for repairs be new. For example, a 50% worn tire would be replaced with a new tire and you, as the policyholder, are expected to pay for the extra tire life added to that wheel. Th is is called “betterment,” which was described above.
As any vehicle ages, it loses some of its value. Th at is why the insurance company is justifi ed in replacing
After the claim
Ontario Mandatory Vehicle Branding Program: What happens if my vehicle is
severely damaged?
On March 31, 2003, the Ontario government mandated the branding of all severely damaged vehicles in Ontario.
Th e Mandatory Vehicle Branding Program is aimed at making roads safer and countering motor vehicle fraud and theft . Insurance companies, auto recyclers, salvagers, auctioneers, dealers and individual vehicle owners must assign a “brand” to vehicles that have been severely damaged and report these vehicles to the Ministry of Transportation (MTO).
Th e program’s major objectives are to:
Enhance road safety by ensuring proper repair of “salvage” vehicles.
Protect consumers in the vehicle marketplace.
Make the use of stolen vehicles more diffi cult.
Make stolen parts more diffi cult to re-use.
Minimize the fraudulent use of Vehicle Identifi cation Numbers (VINs) from wrecked vehicles.
Th ere are four diff erent brands used:
Irreparable – a vehicle written off as a total loss that can be used for parts or scrap only. Th is vehicle cannot be driven in Ontario.
Salvage – a vehicle written off as a total loss that can be used for parts or scrap or repaired, subject to inspection criteria approval branding it “rebuilt.” Rebuilt – a vehicle that was branded as “salvage” but has been rebuilt and inspected in accordance with regulatory criteria.
None – a vehicle not given any of the other three brands because it may have had a damage-related brand applied outside Ontario, it may have been damaged or rebuilt before March 31, 2003, the degree of damage does not meet branding criteria, or the vehicle was never in a collision.
A vehicle could also receive the Stolen Vehicle Designation. Th is can only be assigned by police. Th is designation makes it more diffi cult for thieves to register stolen vehicles because it prevents thieves from putting the VINs from wrecks onto stolen cars.
Th e following vehicles are exempt from the vehicle branding program: trailers, traction engines, farm tractors, road-building machines, bicycles, motor-assisted bicycles, motorized snow vehicles, streetcars, and motorcycles (other than motorcycles that are irreparable) or motor vehicles with a model year of 1980 or earlier.
What if I want to keep my damaged vehicle after a claim?
When your vehicle is a total loss, the insurance company will off er you a cash settlement, then brand and take ownership of your vehicle. If you want to keep your vehicle and your insurer is willing, your settlement will be reduced by the amount the insurer could get from a salvager for the damaged vehicle.
Before you decide to keep your vehicle, consider the following:
If a vehicle is branded as “irreparable,” it can only be used for parts or scrap. It can never be repaired and driven on Ontario roads.
If a vehicle is branded as “salvage,” it can be fi xed but must go to an inspection station and pass rigid safety standards to be reclassifi ed as “rebuilt” and used on the road.
It is not recommended that you keep a vehicle that is branded “salvage.” Th ere have been situations where an owner has spent a lot of money having the vehicle repaired, only to fi nd out later that it does not meet the “rebuilt” standards and cannot go back on the road.
Branding reduces fraud
When you purchase a used vehicle, you can request a Used Vehicle Information Package (UVIP) from the seller, a driver-and-vehicle-licence issuing offi ce, or the Ministry of Consumer Services. A UVIP has the vehicle’s registration, history in Ontario and any liens registered on the vehicle.
Brands are registered by the VIN of the vehicle. Th e brand is displayed on the vehicle permit issued by MTO in Ontario or the licensing authorities in other provinces.
If a vehicle was branded as “salvage” and reclassifi ed as “rebuilt,” you know that the vehicle has passed a rigid inspection aft er being repaired and is safe to drive.
Th is program greatly reduces fraud. Many unsuspecting consumers have purchased stolen vehicles and later had them seized by the police with little hope of recovering the money they paid for the vehicle. Branding off ers greater consumer protection as more and more vehicles are entered into the system and their histories are tracked. Th is makes it easier to tell whether a car has a questionable history.
Driving in the United States
Your Ontario automobile insurance policy covers you in Ontario, elsewhere in Canada and in the United States, and in vessels travelling between ports of Canada and the United States.
In order to understand how this works, we must fi rst examine how your insurance policy applies in Ontario.
Ontario collisions – injuries
If you are injured in a car collision, compensation for injuries may be claimed from your own insurance company, regardless of fault, under your accident benefi ts coverage.
In addition, should your injuries be severe enough to have met or exceeded a certain level of seriousness known as the verbal threshold, it may be possible
to seek further compensation by suing the at-fault driver or owner for pain and suff ering and additional economic losses. In most cases, such claims would involve two diff erent insurance companies – one for the accident benefi ts claim and another for the lawsuit. In some cases, however, both the accident benefi ts claim and the lawsuit could be payable by the same insurance company.
Ontario collisions – vehicle damage
To the extent you are at fault in a collision, your claim for damage to your car would fall under your own optional collision or comprehensive coverage.
To the extent you are not at fault, your vehicle damage would be claimed under:
Your DCPD, provided the at-fault driver is insured by an insurance company “licensed in Ontario” or one that has fi led with FSCO to provide this coverage (direct compensation claims will not
result in an increase in premiums provided you are 25% or less at fault, and your coverage automatically provides a rental vehicle and protection for damage to non-vehicle equipment);
Your uninsured automobile coverage, if the driver and owner of the at-fault vehicle are identifi ed, but uninsured; or
Your own optional collision or comprehensive coverage if the at-fault vehicle cannot be identifi ed.
U.S. collisions – injuries
Your accident benefi ts are portable throughout Canada and the United States. Th e restriction of being able to launch a lawsuit only if injuries exceed the verbal
threshold does not apply to collisions outside Ontario. Th e law that applies is the law of the jurisdiction where the collision occurred.
U.S. collisions – vehicle damage
Damage claims in the United States are handled the same way as they are in Ontario, except that the direct compensation system described above does not apply outside Ontario. Vehicle damage caused by an insured at-fault driver is paid by the insurance company insuring the at-fault vehicle, not by your own insurance company.
Insurance Bureau of Canada is the national trade association for Canada’s private home, car and business insurers.
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