If you own a vehicle, car insurance is a necessary part of life. It’s required by law in all provinces and if you’re driving without it, the penalties can be steep. However, what happens when an insurance company refuses to cover you? What if they refuse to insure you because of your age or driving history?
For many, the process of purchasing or renewing their auto insurance is a relatively straight forward one-step transaction. However, it may not be as simple as you think. In Ontario, there are certain factors that could lead to an insurance company refusing you coverage and this blog post will help outline these considerations for you.
The short answer is yes, an insurance provider can deny coverage. The long answer is that it depends, on your age, driving history and a variety of different factors. Insurance companies will look at how many traffic violations or accidents you’ve had in recent history before making their decision to insure you.
Luckily in Ontario, we are protected by the Auto Insurance Bill of Rights which covers both a consumers rights and responsibilities. Car insurance being mandatory in Ontario means that while you can be denied car insurance by a specific company, you can’t be denied by the entire insurance industry.
Auto Insurance Bill of Rights
Here are some of the key points in the bill you should be aware of:
- You have the right to purchase car insurance coverage
- You have the right to be given written reasons if you have been denied car insurance
- You have the right to keep your policy in place if you pay your premiums and meet the responsibilities
- You have the right to be informed in writing if your policy is not being renewed
On the other side of this, by purchasing an insurance policy you have the responsibility to:
- Pay your insurance premium on time
- Provide true and accurate information on your policy & claims
- Notify your insurer in the event of an accident or if there are any changes to your information (ie. address, phone number, etc.)
Reasons for being refused car insurance
If you’ve been in an accident recently or have a DUI on your record, car insurance companies are more likely to deny coverage. Car accidents can happen for any number of reasons and while it’s true that everyone needs some level of auto protection, the company must take certain factors into consideration when deciding who is eligible for their services. Here are some of the most common reasons someone may be refused car insurance:
Filing numerous claims
The insurance company will have a look at your history to see if you’ve had coverage before and for how long. On top of that, they’ll also take into account any claims filings – such as the time when you filed them. If an insurer sees that filing multiple claims is common behaviour on your part in recent years (typically within five or seven years) then you could be rejected on the premise that you’ll file multiple claims again.
If you file for multiple claims that are also at-fault accidents, your insurer will most likely reject the application. If they see that you were responsible for many of these collisions, it suggests to them that you’re a high-risk driver and cause frequent crashes; this may lead them to deny coverage or offer an expensive premium rate on renewals.
Several DUI convictions/ Moving violations
To be frank, if you’re a risky driver on paper, then it’s a toss up of whether or not an insurer will take you on as a client. If you’ve had more than one DUI conviction within the past ten years, or have committed multiple moving violations in recent years, then your application will most likely be rejected.
With that being said, if you have only one DUI, you may still be able to secure coverage – but this depends on the insurance company. Some insurance companies may increase the premium to accommodate the high risk, others will straight up deny you coverage.
Several at-fault accidents
Did you know that car insurance companies check your driving record before deciding to cover you? Your driving record reveals the number of at-fault accidents in which you’ve been involved, but it also lists the amount that was paid for each claim. When requesting a quote from a car insurance company, they can see your claims history including how many large incidents were on your driving records and what amounts have already been compensated by their own car insurer. In most cases, drivers with a history of at-fault accidents will need to purchase high-risk car insurance, or at the very least face higher premiums for insurance companies.
An insurance company may also deny your claim for these reasons:
- False information on your insurance application
- If you drive a high-performance or luxury vehicle
- A history of defaulted payments
- Insurance fraud
- Claim fraud
- If your vehicle has aftermarket modifications
What should you do when you're denied coverage?
If your application for car insurance is denied, apply to a few other insurers. They each evaluate applications differently and one might give you the quote while another won’t. Working with an agent can also make things easier as they submit your application to several companies at once.
Add yourself to a family members policy
If you are constantly being denied coverage, you can consider adding yourself to a family member’s policy. Car insurance providers usually only let you share a policy with someone you share an address with, and in some cases, a family member who doesn’t live with you.
It’s important to consider the advantages and disadvantages of adding yourself as a driver on someone else’s policy before you do it, because if there are any accidents while driving then both parties involved will be responsible for paying more money.
Find a high-risk insurance company
There are a number of car insurance companies that specialize in providing coverage for drivers with poor driving histories. Unfortunately, these insurers charge much car insurance premiums than standard auto insurance carriers – so you may find your costs going up substantially if you go this route. Here are the insurance companies that offer high-risk insurance in Ontario:
- Intact Insurance
- Perth Insurance
- The Facility Association
Polish up your driving record
Getting an affordable quote from a car insurance company may be hard to get if you have a history of driving violations, but there are steps you can take that will help. Taking an online defensive driving course will help you understand the rules of the road better, may help with reducing the number of demerit points on your licence and you could automatically qualify for car insurance discounts!
Understand other factors
It’s important to understand the other factors that you typically might not think about but can affect your car insurance eligibility. For example, a fast or sporty car may be hard to insure. It may not be as fun for some people – however it could save them money on their auto insurance bill! If the person is considering moving soon then they should get an estimate before committing so that they know how their rates will change when living at another address. Here are some factors car insurance companies take into consideration during your application:
- Postal Code
- Type of Vehicle
- Driving experience
- Driving record
- Claims history
- Credit history
- Annual mileage
How do car insurance companies underwrite your policy?
Every insurance company uses its own underwriting rules and guidelines. These must be filed, reviewed, and approved by the FSCO before they can take effect. Once in place a company cannot use different rules or standards to deny you coverage.
Although rules are different depending on the provider, these are some common rules a company may deny you coverage:
- If a driver has too many moving traffic violations
- If a driver has had numerous cancelled policies due to non-payment
- If a driver has a history of providing false or inaccurate information
There are many rules that insurance companies cannot use to deny someone coverage. Rules that fall under this category will not be approved by the FSCO and run contrary to the Insurance Act of Ontario. These included denied applications based on:
- Your location
- Mental/ physical disability
- Credit history
- Your immigrant status
Although you cannot be denied coverage for these rules, you can be subject to increased insurance premiums.