Gap in Your Auto Insurance History? What Does it Mean for Your Rates?

Gap in your insurance history? How your rates are affected.

There are dozens of reasons why you could have a gap in your auto insurance history. Some will affect your future premiums, and some won’t. The question, ultimately, is why? If you didn’t have a car for six months, that should have no effect. If your license was suspended for impaired driving, on the other hand, it will definitely have an impact on your premiums.

When you call a broker for an auto insurance quote, they’ll ask you if you’re currently insured, and how long you’ve been insured. One of the things they want to know is if there have been any gaps from the time when you were first insured until now. Were there times when you weren’t insured? If so, why? If you have no gaps, then great! If you do have gaps, the question becomes why. There are a bunch of different reasons why you might not have had insurance for a week, a month, or a year. The reason is ultimately what determines if that gap in your insurance history will cause you problems going forward.

Which Gaps Affect Your Premium?

There are lots of reasons why you might have gone without insurance for a spell. Here’s how they might affect your premiums. Note that the following apply to gaps under 1 year in duration.

How Gaps in Your Car Insurance Affect Your Rate
Reason for Cancellation Effect on your Insurance
Your license was suspended because of too many tickets
  • Tickets affect you for 3 years
  • Suspension has no effect
Your insurance was cancelled for non-payment Cancellation affects you for 3 years
Your insurance was cancelled because you lied about something (misrepresentation) Cancellation affects you for 10 years
Your license was suspended because of a criminal conviction related to driving
  • Conviction will affect you for 3 years
  • Suspension affects you for 3-6 years
You didn’t have a car No effect
You parked your car because you didn’t have a job No effect
You started driving a company car No effect
You parked your car during a pandemic No effect
You lived abroad for under a year No effect
You were in jail for something unrelated to driving No effect
Your license was suspended for medical reasons No effect
You got a road-side suspension for borderline blood alcohol or THC (not convicted) No effect
Your license was suspended because you failed to pay child support No effect
Your license was suspended because you failed to pay fines related to driving No effect

The fact is that insurers see a gap in coverage as a red flag on your file. They will want to know the reason for the gap, and will ask you to document those reasons. But it won’t necessarily affect your premiums.

Gaps Longer Than 1 Year

If you didn’t have insurance for a few months, and you’re able to give documentation for the reason, this shouldn’t affect your rate, or your ability to get insurance from any insurer in the province. The fact is that for gaps longer than one year, if you didn’t keep your Ontario driver’s license in force during that time, not only would you have to start graduated licensing from the beginning like a brand new driver, but most insurers would also treat you like a brand new driver. If you were a clean driver before the gap, that would have a huge impact on your premiums for six years, until you build your star rating back up. There are ways to avoid this outcome, but you need to be proactive about it.

How Much Will It Cost Me?

The effect of a gap on your premiums can vary quite a bit depending on what kind of driving and insurance record you had before the gap occurred.

For a clean, experienced driver:

If you had at least 6 years of clean driving experience, you were probably paying some of the lowest premiums available in your area, with one of 40 or so insurance companies that specialize in clean drivers. If you then have a gap that doesn’t fall into the “no effect” group above, you’ll have to go with a high-risk auto insurer, and it will cost you…

  • For a license suspension related to a criminal conviction, at least double for the next 6 years
  • For a non-payment cancellation, at least double for the next 3 years
  • For a misrepresentation cancellation, at least double for the next 10 years

These increases are just because you’d be paying a much higher base rate with a high-risk insurer. If you had tickets as well, there would be additional surcharges. If, on the other hand, your license lapses for more than a year because you weren’t driving or were overseas and forgot to renew it, you would go back to being treated like a brand new driver, and that would probably triple your premium in the first year, but that would start coming down with each year of clean experience you build up.

For a new driver or a driver with multiple tickets and/or at-fault accidents:

The fact is that a gap in insurance would affect this group much less because they are already paying higher rates and may already be with high-risk insurers.

How To Avoid Gaps Hurting You

There are a few things you can do to avoid gaps in your insurance record if you’re proactive, but there is very little you can do to remove gaps that are already there.

  • If you’re getting a new ride, don’t cancel the old car before adding the new one.
  • If you have a short license suspension and can afford it, don’t cancel your insurance during the suspension.
  • If you’re going to be out of the country for a while, again, don’t cancel your insurance if you can afford it. Your broker can suspend coverage on the car for a much lower premium.
  • If you are cancelling your policy because you can’t afford to drive, for medical reasons, or because you’re leaving the country, tell your broker the reason when you cancel.
  • If you’re not driving in Ontario for any reason, never let your Ontario driver’s license expire, and if it does, make sure to reinstate it within 365 days.

What if You Just Lie?

Whenever you are talking to an insurance advisor, you should be truthful. Most of the reasons for a gap will not affect your premium. And the fact is that if there is a gap in your insurance, you won’t be able to hide it for long, because they will pull your insurance records before selling you a policy. On the downside, let’s say you did lie, and you “got away with it”. If that lie comes to light later, say when you’ve been in a serious accident, that could leave you with no coverage, and a host of much bigger problems.

Your Broker is On Your Side

We can’t speak for insurance advisors that work directly for one insurance company, but when you’re talking to a licensed insurance broker like the folks at Mitchell & Whale, we are there to make sure that you get the best deal for the coverage you need. So if you have a gap, and it can be explained without affecting your rate, that’s exactly what we’re going to help you do. Give us a call any time.


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