No matter where you reside in Canada, if you drive a vehicle, it is a legal requirement to have car insurance.
Each province handles insurance differently. In some provinces, it's government-run (known as public insurance), while in others it's government regulated (known as private insurance) — the law remains the same: if you're caught driving in Canada without auto insurance, you will be fined.
However, if you’re involved in a car accident, and you are not insured, the consequences and costs are severe.
What Are the Costs of Driving Without Insurance?
The fines for driving without insurance vary across the country.
For example, being convicted of a first-time offence for driving without insurance in Alberta will cost you anywhere from $2,875 to $10,000. If you don’t pay the fine, you could face up to six months in jail. A second conviction of driving without insurance in Alberta may result in fines ranging from $5,000 to $20,000.
In Ontario, the penalties upon conviction are stiffer: a minimum fine of $5,000 to as high as $25,000 plus a mandatory 25% victim fine surcharge for a first conviction. A second conviction will result in a fine ranging from $10,000 to $50,000.
Driving without insurance can also lead to a licence suspension for up to one year, and the vehicle may be impounded for up to three months; both come with steep costs that you would be responsible for paying. Moreover, the cost of obtaining auto insurance following such a conviction won’t be cheap. You could be classified as a high-risk driver by insurers, which makes it difficult and expensive to get insured.
The reason for this is simple. Cars are fast-moving, heavy vehicles that have the potential to cause a lot of damage to people and property. Insurance protects you and others on the road and can prevent you from having to pay the high costs that can come with an accident.
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What Happens if You’re in an Accident with an Uninsured Driver?
If you get into a collision with another motorist who does not have insurance, but you are insured, there’s no need to fret.
One of the coverages in a standard auto policy is called “uninsured auto”. It protects you from this circumstance, but it has a limit of $200,000 for damage to your vehicle minus a deductible. Your insurance company will pay for the damage to your vehicle, any injury you suffer, and any other expense related to the claim.
However, if you have additional coverage such as collision or upset coverage, it will kick in up to the liability limit. Though collision coverage usually provides funds for damage to your vehicle if you’re at fault for an accident, most insurers will payout for repairs to your car damaged by an uninsured motorist.
What Happens if an Uninsured Driver Flees the Scene of an Accident?
Uninsured (and unlicensed) drivers might flee the scene of an accident. It’s not a smart move to do so. Like driving without insurance, failing to remain at the scene of an accident (often called a "hit-and-run") is illegal and comes with serious consequences. You could be charged under your provincial highway act, or you could be charged under the criminal code.
In Ontario, for example, drivers found guilty of fleeing the scene face incarceration for up to six months, risk losing their drivers licence for two years and face fines ranging from $200 to $2,000 — not to mention accumulating seven demerit points. Drivers found guilty under the criminal code face jail time of up to five years.
If the driver had auto insurance, they would likely face serious premium increases sometimes amounting to surcharges as much as 250% on top of what the driver was already paying. In more severe cases, the insurance company could cancel the policy. However, if the driver didn't have insurance, it will be challenging for them to find a provider after the fact. And once they do, they can expect hefty premiums as these convictions will stay on their insurance record for at least three years.
All convictions go on a driver’s record, which means each insurer as well as other provinces have access to this information. For Ontario drivers, the States of New York and Michigan also have access to driver history due to a reciprocal agreement made between the province and those states.
What If an Uninsured Driver Seriously Injures You?
Suppose you are in a collision with an uninsured motorist and are severely injured. In that case, the accident benefits portion of your policy will cover your medical expenses up to a limit of $200,000 on a standard insurance policy. You have the option of increasing the coverage limit, but you need to ask your insurer to increase it.
You can also add optional protection to your policy to safeguard against this type or risk. Known as the family protection endorsement, in Ontario it’s called Ontario Policy Change Form 44R, and in Alberta, it’s called Standard Endorsement Form 44. Both are designed to protect you and your family if you are seriously injured in an accident by an uninsured driver or as a result of a hit-and-run.
The Value of Being Legally Insured
Accidents can happen at any time to anyone, including safe drivers. Ensuring you have adequate car insurance coverage is the best way to protect yourself, family, and your vehicle as well as others around you.