This article is updated from a previous version.
If you’re worried about every minor at-fault collision bumping up your insurance premium, you’ll feel better knowing that as of 2016, your insurance company can no longer use every minor at-fault collision as reason to raise your premium. If you were involved in a minor collision, your premium won’t change as long as:
- No payment was made by any insurer for the accident.
- No injuries resulted from the collision.
- Damages to each car and property were than $2,000 per car, with these costs covered by the at-fault driver.
According to the Financial Services Regulatory Authority of Ontario (FSRA), this rule applies to one minor accident every three years.
Here are seven things you need to consider when submitting a car insurance claim or deciding to pay for the damage yourself.
Related: How your Ontario driver licence type affects auto insurance rates
In this article:
1. Reporting the collision
In Ontario, you don’t need to report a collision to the police if the total damage to all vehicles is below $2,000, if there are no injuries, property damage, or suspicions of impaired driving or illegal activities.
However, you should always notify your insurance company of any collision or damage involving your car. If you don’t, and your insurance company finds out, they could cancel your policy.
If your damage is under $2,000, you don’t have to file a claim. If you are thinking of filing a claim, however, make sure you consider what your rate increase will be. Remember, your rate increase will last up to six years.
If your car was involved in a collision with a hit-and-run driver (including being hit while your vehicle is parked), you will have to pay your deductible, but your rates shouldn’t increase. A police report will be required for this to be considered a not-at-fault collision. Most insurance companies require that you notify the police within 24 hours before they’ll consider it to be a hit and run.
You’ll also need to report the collision at the nearest collision reporting centre, which has a service where you can report your accident to your insurance company. The collision reporting centre will provide you with a record for your notes. If you are planning to make a claim, you need to report your collision to the insurance company if the damage exceeds $2,000 for both cars.
If you don’t notify your insurance company of an accident, whether you are at fault or not, and the other party makes a claim through their insurance, your insurance provider will find out about it.
2. Determining fault
Ontario auto insurance companies use a set of fault determination rules to determine who is at fault for a collision. If you are found at fault, the accident can stay on your driving record for six years and may increase your insurance rate.
When reporting a collision, police determine if there has been a violation of the law. Your insurance company will still determine fault and, ultimately, whether your insurance rate will increase. Even if the police determine an accident was not your fault, you can still be surprised by your insurance company finding otherwise.
A driver’s level of fault can range from zero to 100%. This information will be recorded on your insurance record. If you are found to be 50 percent or more at fault, it is likely that your premium will go up the next time you renew your policy.
If you are ever confused about insurance policy wording, speak to your broker to clarify what is included in your policy.
Related: Fault determination after an accident: what you should know
3. Seeking help
If you question the determination of fault in your insurance claim, FSRA recommends that you reach out to your claims adjuster. They are tasked with investigating the claim and can provide information about the specific Fault Determination rule applied in your case. Understanding this rule can clarify how the decision was reached.
However, if you still disagree with the decision, you have the option to contact the insurance company’s complaint officer to express your concerns or to seek a second opinion from a legal counsel, expert or an organization like the General Insurance Ombudservice (GIO).
The GIO impartially mediates between insurance companies and drivers regarding fault determination rules. If you’re unable to resolve the disagreement independently, the GIO can assist you. Their service is free of charge and available in both French and English from anywhere in Canada.
Related: Can you dispute an auto insurance claim?
4. Your insurance rate
A driver with an at-fault collision can see their car insurance rate jump by as much as 30% and remain high for six years. If a driver has another at-fault collision during this time, they may be considered a high-risk driver and find it difficult to obtain affordable insurance.
Insurance companies factor in a lot of details when generating rates for drivers. Rates may vary slightly based on the type of vehicle someone drives or their location but there are vast differences between drivers with a clean record and those with collisions.
After a collision, take the increase in rate your insurance company quoted you and multiply that number by six — the number of years your premium will increase for — to see how much the collision will really cost you.
For example, let’s say you find yourself facing a rate increase of $500 a year for six years. If the cost to repair your damage is only $1,000, you might be best to fix it out of pocket rather than file a claim and pay potentially $3,000 over time (500 x 6) for the damage through insurance.
If you choose to submit your claim through insurance, switching insurance providers when your policy renews may help you lessen the amount you’ll pay through your current company for those same damages. Each driver’s profile is different so be sure to compare auto insurance quotes. You could save money by switching your coverage to a new insurance company, especially as time goes on. You may find an insurance provider with a lower rate as your accident gets “older.”
5. Paying for and repairing the damage
Choosing to pay your own claim when the damage is below $2,000 can save you money in the long run, as it prevents your insurance premium from increasing.
For example, if you make a claim for $600 but have a $500 deductible, your insurance will reimburse you only $100. Your premiums may also increase when you renew your insurance. You may pay more in premiums over the long term than the $100 you save by making a claim.
While the decision of where you want to have your car repaired is up to you,
insurance companies often have preferred repair shops. The Insurance Bureau of Canada (IBC) suggests that the preferred-shop program helps control claim costs, and ensures repairs meet high standards.
The insurance company will deal directly with its preferred shop on your behalf and guarantee the work is done properly.
Related: To repair or not to repair: Who decides?
6. Filing a claim
If you have had a prior accident within the last six years, or tickets in the past three years, your insurance company could cancel your policy. A combination of wrongdoings could designate you a high-risk driver. You should ask your insurance broker about cancellation conditions that may be in your policy before submitting a claim.
To see how many traffic tickets you have on your record you will need to order your driver’s abstract from ServiceOntario. Insurance companies can increase your rate for three years from the date of conviction for a ticket. Tickets insurance companies charge for range from minor to serious and can have more repercussions than a simple fine.
Related: Driving infractions, tickets and penalties
An auto history report (Autoplus) is free from Conseillers en Gestion et Informatique (CGI) and will list all prior claims history since you received your driver’s licence. It is important to see what claims you may have already submitted through any insurance company.
If you have a good driving record you may qualify for accident forgiveness coverage. For an additional cost, the coverage can wipe away the effects of an at-fault collision after a driver’s first offence. But this coverage won’t transfer to a new company if you switch insurance providers. The accident will still appear on your driving record.
7. Comparing your rates
If your premium does rise as a result of an at-fault collision, you still have options. You can shop the market right away to see if another insurance provider is willing to offer you a lower rate based on your driving history. Alternatively, you can compare insurance rates annually as the collision on your record gets older and older and has less bearing on your premium.
