Car Insurance: Your Questions Answered

Car insurance is mandatory in Canada, but most Canadians don't necessarily understand all the intricacies and details of their policies. This can lead to making poor decisions about insuring themselves and their vehicles. Fortunately, we have the answers to some of the most commonly asked questions about car insurance in Canada.

Q: How much will it cost?

A: Your insurance premium is calculated based on a number of factors. The most important factor, (which will have the largest impact your rate), is your driving record. Each accident or traffic ticket that you accumulate will increase the cost of your premium. In addition, the type of car that you drive, the number of kilometres you drive each year, and where you're driving. Getting rate quotes from an objective source like can help you understand how much you can expect to pay, and put you in touch with the provider offering you the lowest premiums.

Q: How long will a traffic ticket or accident affect my insurance rates?

A: Traffic tickets stay on your driving record for three years. Accidents remain on your record for six years. In most cases, your insurance company will not adjust your rates mid-term, but they will increase your premiums at your annual renewal. Your rate increase will be effective for the appropriate number of years from your renewal date.

Q:    What is Facility Association Insurance?

A: High risk drivers can be refused insurance coverage through regular insurance providers. Since insurance coverage is mandatory in Canada, Facility Association insurance is in place for those drivers who are refused coverage by regular insurers. High risk designation is typically assigned to drivers with a poor driving record, or for drivers whose policies have been cancelled due to non-payment or late payment.

Q: Do I have to report an accident to my insurance company?

A: Reporting accidents to your insurance provider is the best way to protect yourself and your vehicle. This is particularly important if there is damage to one of the vehicles involved or if anyone is injured in the accident. By not informing your insurance company, you may find yourself in breach of your insurance contract and that could result in cancellation of your policy.  In addition, you may not be protected financially if the other driver decides to make a claim.

Q: Do I have to report an accident to the police?

A: You are required to report an accident to the police if anyone involved is injured, or if there is $1,000 or more in damages as a result of the accident.

Q: Should I admit fault at the accident site?

A: No. The police will decide fault on site. Co-operate with the police, and explain honestly how the event happened, but steer clear of making any admissions of fault or guilt. Even if you believe you are completely at fault, the circumstances may change depending on the information the police receive from the other driver or eyewitnesses. You may not have seen everything or have all the facts! The police will see the accident from all perspectives and make a fully informed decision as to who is at fault.

Q: What information should I collect at the accident site?

A: Get as much contact information as you can from driver(s) and witness(es). This means their names, addresses, phone numbers and driver's license numbers if possible. Make sure you get the make, model and license plates of any car(s) involved in the accident. Also, you should record the address and/or intersection where the accident occurred. Finally, be sure to get the name and badge number any police officers at the scene.

Car insurance can seem complicated. So asking the right questions is important. Make sure you understand all of your rights and the obligations you have under your policy. Ask your insurance broker or provider if you have inquiries specific to your situation or policy. Your insurance company will help you understand.