We have a lot of customers who ask questions about high-risk auto insurance and what it means to be deemed a high risk driver after receiving a notification from their insurance company. We thought it would be a great opportunity to shed some light on the topic and make it a little bit less scary for those of you who find yourselves needing to shop around for new insurance.
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Why am I considered a high risk driver?
Paul - Scarborough, Ontario
You're a high risk driver if you have too many tickets and/or accidents for the regular market.
There are three tiers to the home and auto insurance market in Canada: the regular marketplace; the high risk marketplace, which consists of five companies; and then there's the last resort which is the Facility Association. If you are squeaky clean, with a 20 year record, you get the best rates in the market. If you have little less of a great record, it's a little more expensive. If you get one ticket, it's a little more expensive. With 2 tickets, you can stay in there, but just barely. 3 tickets and more, or a couple accidents within a few year period, you'll get moved into the high risk market until your record improves, and then you're allowed back into the regular market.
Think of it like the penalty box: you broke the rules, and now you've been put in the box, which means you have to pay a higher rate, and possibly have lesser coverage. However, if you behave yourself after a certain period of time, you'll get let back into the game, and if you continue to behave, you get to keep playing, and playing the regular game. If you misbehave again, you'll go back in the penalty box. Now unlike some of those sports, you can continue to get more penalties when you're in the box, you never get let out. So it's up to you—control your record, drive well, don't get tickets, don't have accidents, and you'll be let out to access the low risk rates again.
How many tickets do I need before I'm considered a high risk driver?
Felix - Ottawa, Ontario
That's a moving question, but we'll speak in generics for most companies. If you have three or more tickets in a three year period, you're going to have a hard time getting into most insurance companies. There are some exceptions to that—you're allowed into a couple of them. Insurance companies change their strategies, but for the most part, three tickets in a three year period is when you'll start entering the high-risk pool.
Keep in mind that tickets are measured over a three year cycle, so it's not I had 3 tickets over 20 year driving history. If you have three tickets on your record, you're probably going to get kicked out your company and have to find another. If you have four or more tickets, you're definitely getting kicked out of your regular market insurance company.
How much more is high risk auto insurance?
Barb - Toronto, Ontario
High risk auto insurance can be 50 percent more, and probably more often it would be 100 percent more than regular rates. For those with five, six, seven tickets, and a few accidents, it can go well into the 10 times more. If you're a young driver without the driving experience to back it up, you could see a $20,000 insurance premium.
More often it's 50 or 60 percent surcharge over the regular rate if you're just a little bit into the penalty box.
If I've been deemed a high risk driver, how long do I stay a high-risk driver?
Amir - Ajax, Ontario
This is a really good question for people who have been put in high risk markets to pay attention to. You're not a high risk driver forever. Your tickets fall off your record and can't be rated for after 3 years, so if you have tickets, it would be well worthwhile for you to go get your driving record report and note in your calendar, or wherever you keep your records, the anniversary of those tickets. The same goes for the anniversary of your accidents.
Every time one of those tickets becomes 3 years old, you want to re-shop the insurance product, or work with a broker that's automatically going to re-shop it for you, so that you can get those savings. And for every anniversary of your accident, you get one more driving record star, so if it's a 6 year record, and your accident becomes 5 years old, you get one more star, and your insurance becomes cheaper.
So on the anniversary of every accident, and every time one ticket becomes 3 years old, you want to shop, or work with a broker that does that for you.
If there is a high risk driver in my household, will I automatically have to pay a higher premium?
Sol - Burlington, Ontario
You'll automatically have to pay a higher premium if you want them to be able to drive your car. You have the option to exclude them off your policy and stay with a standard insurance company that they don't qualify for, but if they sign that excluded form and then drive the car and have an accident, there's no coverage with it. You two options: you can either pay for them and go to a high risk company so everybody can drive it, or you can have them excluded off the policy.
What do I need to know about an excluded driver forms, and why is my spouse's insurance company requesting one?
Ginny - Burlington, Ontario
An excluded driver form is an agreement that the insurance company is not providing coverage for a member of your household on your policy. If one of your kids, or your spouse, or somebody in your house has a bad record, you can still get access to the least expensive insurance rates by excluding them off your policy.
Every driver in your household has to be listed on the policy, so the insurance companies generally charge for the highest rated driver or the highest cost—or highest risk. If one driver has five tickets, and another driver has no tickets and a great record, you can't just tell the insurance company that only the person with the clean record is going to drive a car. The person with five tickets could also drive the car, but the contractual way to get around that is you sign an excluded driver form and that tells the insurance company that only the person with no tickets and a great record is covered.
An excluded driver form is a great way for you to stay in the standard market even if one of your household members is in the high-risk market.
I got a letter from my high-risk auto insurer telling me my policy was being canceled this year. What gives? All my tickets are even off my record now.
Kiko - Toronto, Ontario
Getting kicked out of your high-risk insurance company might feel crappy because you're getting rejected or “fired”, but what you need to know is that's the greatest firing or rejection letter you can ever get. You're getting kicked out of insurance premium hell where you're paying a whole lot of money because high risk companies are only allowed to insure people with high risk records. This is now your gateway to be allowed back into the standard market.
Insurance companies in Ontario have to file their rates with the government, and they have to declare what they're charging to which people. If you're getting kicked out it's most often because you are now too good of a driver for them to legally be allowed to ensure you.
I have a couple of tickets on my driver's license but don't have any demerit points. A cop who ticketed me told me it doesn't affect my driving record since there's no points, so do I just go ahead and pay and don't bother fighting it? Do demerit points affect my insurance?
Samer - Cornwall, Ontario
In Ontario, demerit points do not affect your insurance. You've hit on my personal pet peeve. I like cars, and I've had some speeding tickets. It's a great classic line that some police seem to use for getting out of the fight and letting you drive away. Hey, we reduced it from 20 kilometers over the speed limit down to 9 kilometers over, so there's no demerit points and this won't affect insurance. It may be true that there's no demerit points, but demerit points have absolutely nothing to do with insurance. Demerit points are what regulate how long you can keep your license before they take it away; insurance is just based on infractions.
Regarding tickets, all that matters is if you've been convicted of breaking a rule or not. And how many times did you get convicted of breaking a rule? And then there's one category deeper: was that conviction a serious infraction? For example, did you get a DUI? Did you hit somebody as a pedestrian? Did you get a dangerous driving charge vs. a smaller speeding charge? So it's a great line; it helps you keep your license longer with no demerit points, but avoiding demerit points won't help your insurance.
If you're trying to reduce your insurance costs, you need to fight the ticket until they let you plead not guilty, and you have no conviction. Sometimes it's possible to pay a fine of $100, $200, or $300, where there's is no charge for speeding on your record.
If you get a DUI, how long does that stay on your driving record?
Jared - Mississauga, Ontario
If you get a DUI without losing your license, it's the same as any other conviction: it will affect you for the 3 years that it's on your driving record. If you have multiple events or it's so bad that you lose your license, you could have to restart your licensing, which would also restart your insurance experience from square one.
I've heard there's more than one high risk insurance company out there. Which one has the best rates?
Brendan - Richmond Hill, Ontario
There is there is no such animal. There are only five high risk insurance companies in Ontario, so working with a broker that has all five makes it really efficient for you because then you can get the entire market view of what's best. It will all be dependent on your situation: what car do you drive; how is your record; what are your tickets; and how much are you driving, and in which city. Answers to those questions will decide which company is best for you. On top of that, those companies will go through restructuring and different strategies and events, so that answer, even for you as an individual, could change. To best navigate the high-risk space it's best to work with a broker that has all five high risk insurance companies
It's like trying to pick the one stock that's going to be the best in the stock market: it's never going to be the best forever.
If I get a careless driving charge, how long will that charge affect my insurance?
Philippe - Kitchener, Ontario
If you get a standalone careless driver charge, and you're able to keep your driver's license, it'll affect you for 3 years. If it's more severe and you lose your license, then you could start from square one of rebuilding year insurance history.
If I hit black ice and go off the road and crash my car, how long will that impact my insurance?
Mo - Toronto, Ontario
This is a common question. The general saying for this is: if you're going drive a car, you're charged with the absolute care, custody, and control of the car. If the weather conditions only permit you to drive a few miles an hour to remain safe, it's your obligation to remain safe. So if you drove at an unsafe speed or at an unsafe time on unsafe road, it's going to affect your insurance, just as if you had hit somebody else, or a tree, or a ditch—you were in control of your car.
It's the same as with any other accident; most companies will look at that accident for 6 years, but it's becoming more common for companies to look at accidents going back 10 years, and some up to 20 years. That's to say that you'll get most of your discounts in the first 6 years of accident-free driving, but they'll give you progressively more discounts as you get to 10 years of accident-free driving, and now with some companies, up to 20 years accident-free driving.
If I get into an accident driving my own car while my license is suspended, will my insurance company still cover the damage to my car?
Maria - Toronto, Ontario
The short answer is no. If you get into an accident with a suspended license or cancelled license, your insurance won't cover it. You need to have a valid license in force to drive for the insurance to be in effect. There's no difference between crashing your car on a suspended license, or a cancelled license, or if you've never been licensed.
Note: The information above is for general purposes and does not constitute legal advice. Be sure to talk to your broker if you have more specific questions about insurance, and especially if you need answers that are specific to your circumstances.
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