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Facility Association Insurance

March 29, 2011

The Facility Association is an unincorporated non-profit insurance organization that allows all drivers to have access to auto insurance coverage, even if they have been turned down by other insurance companies. Having trouble finding insurance? Facility Association makes it possible to obtain high-risk auto insurance in Ontario and other Provinces.

The Facility Association is made up of automobile insurers that provide car insurance in Ontario, Alberta, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland, Yukon, Nunavut and the Northwest Territories.

Drivers who secure car insurance through Facility Association are those who cannot get vehicle insurance through regular car insurance companies due to prior accidents, a poor driving record, a previous history of insurance policy cancellations, non-payment or other issues.

How does it Facility Association Insurance work?

Facility Association insurance is available through any licensed insurance professional.   You can access Facility Insurance through your regular auto insurance company and that company will handle any claims or other administrative tasks just as they do with any insurance policy.

The biggest difference with Facility Insurance is the cost.   The cost of premiums through Facility Association is significantly higher than you would expect to pay elsewhere.   The reason for this is that drivers who need to buy their insurance through the Facility Association are considered to be high risk drivers.   This additional risk makes them more costly for insurance companies to provide coverage to and the resulting cost is passed on to these drivers in the form of higher premiums.

Facility Association helps keep premiums as low as possible for regular risk drivers by absorbing a large portion of the cost of the highest risk drivers, allowing car insurance companies to keep auto insurance premiums lower for the vast majority of drivers.   Only a small percentage of drivers need to use this kind of car insurance.

If Facility Association loses money in a given year due to the volume of claims that they process, that deficit can be passed on to regular car insurance companies, which may result in higher premiums for everyone.   On the other hand, if Facility Association takes in more money than it needs to cover the claims made during the year, the surplus funds can also be passed on to regular insurance companies, allowing them to keep costs down.

Why would I need Facility Association Insurance?

To qualify for Facility Association insurance, you must first be denied insurance by at least one regular insurance company.   If you are denied insurance coverage, your insurance company will issue you a declination letter.   You must submit this letter when you apply for facility insurance.

You may be denied auto insurance coverage through regular means if you:

  • Have a poor driving record. Driving convictions such as speeding tickets, reckless driving and traffic violations stay on your record for three years.   If you accumulate multiple driving convictions, you may be determined to be a “high risk” driver and your regular insurance company may deny you coverage.
  • Fail to pay your premiums. This is perhaps not such a well-known risk, but failure to pay your premiums on time, even for one month, may put you in the high risk category.   It’s best to put your premiums on a direct withdrawal system at the bank to ensure that you don’t miss any payments.
  • Have had multiple accidents. Traffic accidents stay on your file for six years.   If you are determined to be “at fault” for a number of accidents within this period, you may fall into the “high risk” category and be denied regular insurance.
  • Are affected by other specific factors. In rare cases, you may need to apply for Facility Association insurance depending on where you drive, the type of vehicle you drive, or how the vehicle is used.

How can I avoid Facility Association Insurance?

The best way to avoid needing to buy Facility Association Insurance is to keep your driving record clean.   If you are currently insured through Facility Association, each year that you have no accidents or convictions will help qualify you for a better rate.   If you have no tickets in the past three years or accidents in the past six years, you should once again be eligible for regular car insurance again.

As mentioned, you also need to keep your auto insurance policy up to date by paying your insurance premiums on time to avoid being denied regular insurance.

If you feel that your driving record may not warrant being placed with Facility Association, shop around and try to find an auto insurance company that is willing to cover you.   An insurance broker can be invaluable in this process as they have access to a number of insurance products for which you may be qualified.   They can help you find the best car insurance rates and are fully qualified to answer your questions and find the information you need.

You have nothing to lose by shopping around for better car insurance quotes and asking questions.   You might just save yourself a significant amount of money on your annual auto insurance premiums.

How to keep your car insurance rates cheaper

Drive carefully.

If you’re insured with Facility Association because of your driving record, it’s important to remain accident-free and ticket-free. Each year that you drive without any tickets or car accidents, it will help you get a better car insurance rate. Accidents stay on your driving record for 6 years and tickets for 3 years.

Pay your insurance premium on time.

If you’ve missed payments in the past and are insured with Facility Association for this reason, you should aim to pay your premiums on time. You may be paying higher premiums to be insured with Facility Association; so the faster you pay your premiums, the faster you will be able to clean up your record.

Other insurance savings tips

  • Increase your deductible amount for both collision and comprehensive.
  • Remove collision and/or comprehensive coverage if your car is older.
  • Exclude drivers who have tickets and accidents from your policy
  • Purchase a car with a lower insurance rating.

Always be sure to check the car ratings before buying a car.