The Insider - April 2009

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In April 2009's Insider, you'll find

Think again - and consider the repercussions of not having coverage.

Do you know how your auto policy's "accident forgiveness" coverage works?

  • Who's looking out for you?
  • Understanding the insurance industry and how its various organizations and regulatory bodies help protect you.
  • Plus don't forget to check out our newest feature, Did you know?, at the end of the Insider.


Welcome to the April 2009 edition of's Insider newsletter.

With the current economic situation continuing to present fiscal challenges, many of us are looking for new, creative ways to save money. Cutting back on unnecessary spending and putting money aside for the future is a wise course of action, but cutting back on your insurance is not.

In April's Insider, we look at why you shouldn't cancel your car insurance - both for safety and legal reasons. We also explain how "accident forgiveness" works and why you may want to add this coverage to your policy. Plus, we tell you about important insurance industry organizations and how they help protect your interests.

If you're worried about how you can cut down on costs, instead of cancelling your coverage, visit where you can find the lowest rate available from over 30 competing insurers and get connected with our network of licensed insurance professionals.

Thinking of cancelling your auto insurance?

With bills to pay and the state of the economy keeping you up at night, you've probably been trying to think of ways to cut down on your monthly costs. You may even be contemplating terminating your auto insurance policy, wondering what will happen if you don't have insurance

If you think it's expensive now, you should know the consequences of not having auto coverage could be infinitely more expensive than the monthly payments. Here are some important points to keep in mind when it comes to the value of auto insurance:

  • By cancelling your insurance policy with your current insurance company, you may not be able to purchase a new policy at the same rate.
  • You may face higher insurance premiums when you purchase a new policy later on.
  • If you continue to drive without auto insurance in Ontario, you face a fine of no less than $1,000 and no more than $5,000 for the first offense, and no less than $2,000 and no more than $5,000 for the second offence, including possible jail time of up to six months.
  • You may be denied auto insurance coverage by a standard market in the future when companies find out you've been driving without a policy.
  • If you lie about having auto insurance when you don't and are found guilty of being fraudulent about your policy in any way, in the worst-case scenario you could face a fine of $100,000 for the first offence and up to $200,000 for additional offences under the Insurance Act.

Tip: Keep in mind that lying doesn't pay - insurance companies will find out about your previous policy, when you cancelled it, and why, through access to insurance company databases which contain this information.

In Ontario, it is illegal to drive without having an auto insurance policy. With that in mind, the Facility Association exists to ensure that auto insurance is available to all drivers who are unable to obtain auto insurance through the voluntary insurance market.

So if you are looking to save money by lowering your insurance costs, instead of terminating your auto policy, your best bet is to shop around for a better rate, which is easy to do at with its access to quotes from over 30 competing insurers to help you find the lowest rate available for your driving profile.

All about accident forgiveness

Accidents can happen to anyone - even good drivers with clean records aren't immune. So what can good drivers do to help protect themselves from higher premiums? One option worth considering is to purchase "accident forgiveness."

Here's how accident forgiveness works:

  • Essentially, accident forgiveness protects you from rate increases if you get into a car accident - even if you're found to be at fault by your insurance company.
  • Accident forgiveness usually only applies to your first at fault accident.Tip: Remember that insurance companies "forgive" but they don't "forget" - your accident will still go on record.
  • If you cause an accident, know that accident forgiveness does not protect you from being charged if you broke the law, nor does it keep you from gaining demerit points.
  • You can inquire about adding accident forgiveness to your auto policy by consulting with your insurance broker or agent.
  • Check with your insurance agent or broker to see if you're eligible for accident forgiveness - some companies offer this at no cost to good drivers who have been with them for a set period (three consecutive years is typical).Tip: The cost is typically only $35 to $50 per policy term.

Whether you have a clean driving record, or one with tickets and accidents, there's an insurance company with the lowest rate for your driving profile out there. can help you find that rate by allowing you to compare quotes from 30 competing insurers, instantly and for free.

Who's looking out for you?

When it comes to understanding the insurance industry in Canada and Ontario specifically, it can get a bit confusing for the average consumer. What organizations are out there? And what regulatory bodies are helping protect your rights as a policyholder?

Insurance Bureau of Canada (IBC)


The IBC is a national association that represents private home, business and auto insurance companies. The IBC acts on the part of its members by responding to and forecasting industry issues, as well as support members' needs by identifying new industry opportunities.

The IBC also lobbies the federal and provincial governments in order to help promote changes in public policy, which benefit insurance companies and, in turn, their customers. The bureau also helps foster public understanding of how car, home and business insurance works.

Financial Services Commission of Ontario (FSCO)


FSCO is a regulatory body that covers, among many various industries, the insurance industry. FSCO's mandate is to help promote public trust and consumer confidence in the Ontario auto insurance industry. This government-mandated body essentially helps make sure that the auto insurance industry stays above-board in its actions.

Registered Insurance Brokers Association of Ontario (RIBO)


This self-regulated body serves insurance brokers in Ontario. RIBO serves consumers by regulating the ethical conduct, licensing, professional ability and competence and insurance-related financial obligations of all the independent insurance brokers in Ontario. RIBO helps ensure that consumers don't become victims of fraudulent or illegal activity.

CGI Group Inc.


CGI Group Inc. is a technology firm that provides consumers with a history of their driving claims. CGI serves the auto insurance industry in Canada by providing you with your insurance history report, which includes your automobile policy and claims history as reported by the Canadian property and casualty industry. You can request a insurance history report once every 12 months, provided it is only used for your own personal information.

If you want to obtain information or your insurance history report, you can visit to get more information on how to connect with CGI Group Inc.

Ontario Ministry of Transportation (MTO)


If you're a driver, you've already connected with the MTO. Responsible for drivers and provincial roads and highways, this government body provides you with a license to own and operate a vehicle in Ontario (which you have to obtain through the Ontario Graduated Licensing System), license renewal, vehicle ownership registration, your driving abstract and a record of your moving violations and parking tickets. The MTO requires you to have an auto insurance policy in order to obtain a driver's license; hence it is also tied to the auto insurance industry.

Quote Unquote


Am I covered under my homeowner policy if the sewer in my neighbourhood backs up into my basement?


Most standard home, tenant or condominium insurance polices do not cover damages due to a sewer backup. You can, in most cases, however, purchase this protection and have it added to your policy.

Sewer backup is the result of sanitary sewer surcharge, which occurs when excess, unwanted water enters sanitary or combined sanitary/storm sewer systems. A surcharge can force sewage into lower levels of houses through connections to the sanitary sewer system (which includes toilets, floor drains and sinks). It can be very expensive to clean up.

If your standard policy does not include this coverage, the cost to add this coverage to your policy is typically around $50 dollars per year and may depend on where you live. Some companies do not offer this type of coverage, so check with your insurance professional.

Have a question you'd like answered? Please send us an email at [email protected].

Check back every month for new Quote Unquote questions and answers about insurance from readers just like you.

Did You Know?

The scenario: You've been in an accident where the other driver is found to be at fault. Your policy covers you for up to $1,000,000; theirs covers them for $200,000. The case goes to court and you're awarded $500,000 - now what? The court will award you a judgment of $500,000, taken against the at fault driver who caused the accident. Even though the at fault driver who caused the accident only has $200,000 worth of liability insurance, your insurance company will pay the remaining balance of $300,000.

So what Ontario Policy Change Form (OPCF) provides you with the ability to add extra insurance to your Ontario auto policy coverage for this situation?

The form: OPCF 44, which is also known as the "Family Protection Endorsement" form, provides limited protection to you and your family members from injury caused by another driver who has less liability insurance than you do.

The coverage pays for the difference between your liability limit and the one carried by the driver who was at fault for the accident. It also covers you if the at fault driver does not have any insurance coverage.

Details of the OPCF 44 include:

  • Covers you or a family member if you are injured in a car accident.
  • The OPCF 44 is automatically applied to your auto policy.
  • The OPCF 44 is inexpensive and ranges anywhere from $5 to $40 per policy term.