After a minor fender bender, you might think it makes sense to pay for the damage out of pocket and avoid the potential rate increase on your car insurance. While this might seem like a good idea at the time, it’s important to know that there are possible repercussions to this decision that could come back to haunt you.
Before we dig into when you must notify your insurer, let’s start first with when you must report a collision to the police.
Your responsibility for reporting an accident to the police
Any accident where the damages are significant must be reported to the police, usually within 24 hours. A collision report must be filed in Ontario if it’s believed the total damages caused to the cars involved will reach a combined repair cost of $2,000. This amount is shockingly easy to reach in today’s new high-tech vehicles. The same threshold is true in Alberta. If you live outside of these two provinces, the limits may differ so it’s best you check your province’s collision-reporting rules should you be involved in a collision.
Regardless of the dollar value of damages caused, there’s no question that police need to be notified right away if:
- There’s been an injury (no matter how minor) or death
- The collision is due to a suspected criminal act like impaired driving
- There’s a government vehicle (federal, provincial, or municipal) involved, or a vehicle is transporting dangerous goods
- The collision is with an uninsured or unlicensed driver
- There’s damage to private, municipal, or highway property (like a homeowner’s lawn, telephone pole, or guard rail)
- Pedestrians or bicyclists are involved in the collision
Whether the repairs needed are minor or significant; generally, the police do not report the accident to your insurance company. That doesn’t mean your insurer won’t find out in another way though. For example, should the other driver (or drivers) choose to report the collision to their auto insurance company, yours will be notified as well, whether you like it or not.
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Your responsibility for reporting an accident to your insurance company
Your car insurance policy is a contract, and there are all sorts of requirements outlined in your policy booklet that both you and your provider have agreed to follow. One of the conditions policyholders agree to is to report all accidents to the insurer. The good news is you don’t have to notify your insurer right away. You’re usually asked to notify them as soon as possible, but you must do so within seven days. Your insurer relies on you to uphold your end of the agreement and keep them in the loop of any collisions.
However, the reality is any driver involved in a collision – especially a minor collision – is wary of involving their insurance company. The only driver who isn’t wary is the one who feels they are 100% not at fault for the accident. But what about the other driver who is envisioning a spike in their rates at renewal? Believe it or not, a hike in insurance premiums isn’t always the case for a minor collision. In Ontario specifically, insurers are not allowed to use a minor at-fault accident to increase your premiums.
Yes, you read that right: In Ontario, insurers are not allowed to use a minor at-fault accident to increase your premiums so long as all of the following conditions are met:
- The collision happens on or after June 1, 2016 (This was the date when the directive that minor collisions can’t be used to hike a person’s rate came into effect.)
- There are no injuries and damage is less than $2,000 per vehicle
- None of the people involved submits an insurance claim for payment
- The at-fault driver pays for all of the damages
There’s one last caveat too: you’re limited to one minor accident every three years.
What happens if you do not report an accident?
What happens if you do not report a collision will depend entirely on all drivers and vehicle owners involved. If everyone agrees to keep it between themselves without bringing in the insurers, then you’re relying on the word of total strangers. You’re relying on them never to contact their insurance company to submit a claim. It’s a risky endeavour because all it takes is one person to go through their insurance for the plan to fail, and the reality is sometimes circumstances change. For example, injuries can initially go unnoticed but flare-up, prompting the need to submit an insurance claim.
If your insurer learns of an accident, an accident that they should have been notified of, your car insurance rates could increase; it won’t matter even if you paid for the vehicle repairs out of your pocket. An at-fault accident - with or without an insurance claim - may be a reason on its own for a rate hike. When it comes to collisions, rate increases do not occur just because you filed a claim but based on the fact you were responsible for an accident as well. That’s why the rates for drivers who are 100% not at fault for a collision don’t increase. It wouldn’t be fair since they were simply in the wrong place at the wrong time.
Things to know when shopping for car insurance
When you are shopping for car insurance, you must disclose everything on your driving record or insurance history. There should be no surprises.
If you’re uncertain about what’s listed on your driving record, you can get a copy from your provincial government, usually for a fee. On the other hand, your insurance history report is free to obtain, but it’s mailed to you within 10 business days of CGI receiving your request. CGI is the company that maintains the information about auto insurance policy and claims data in Canada on behalf of the industry.
Your insurance history is detailed in what’s called an AutoPlus report. This report includes information about your most current insurance policy. It also lists insurance claims, if any, for the past 20 or so years. It details the types of claims submitted (collision, theft, or bodily injury, for example), how much was paid out and, the degree of fault assigned. It also includes third-party claims and reasons for policy cancellations, if there are any in your history.
Cheap auto insurance rates are no accident
Your driving record and insurance history factor heavily into the auto insurance rate you pay. The good news is a collision won't follow you forever. In the meantime, the best way to drive down your auto insurance rates is to shop around. It’s the only way to know for certain that you’ll get the lowest rate possible.