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Car Insurance: Your Questions Answered

December 1, 2010

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 InsuranceHotline.com 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.

  • http://www.insurancehotline.com/ InsuranceHotline.com

    Hello JC,

    Typically, accidents and major convinctions remain on your record for 6 years, then they fall off… however, some reports can go back 10 years… you can order a copy of your full driving history from the Ministry if you like?

  • http://www.insurancehotline.com/ InsuranceHotline.com

    Hello A.S.

    You can view your specific coverage details on your policy. If you have questions about sufficient coverage for you and your needs, this is where your insurance professional (broker/agent) is qualified and experienced to explain, answer and advise you. Give your insurance professional a call to discuss this.

  • http://www.insurancehotline.com/ InsuranceHotline.com


    Each insurance company has their own rules for how long an accident affects your insurance premium. When any insurance company pulls your accident history, the report will show all accidents some may go back more than 10 years. You can check your own reports. There is some information here http://www.insurancehotline.com/auto-insurance-claims/

    Thank you

  • http://www.insurancehotline.com/ InsuranceHotline.com


    If your child has a valid drivers’ licence and your permission to drive the vehicle, they will be covered under your policy. Remember that if they are involved in an at fault accident, you may see an increase in your insurance rate.

    Thank you

  • http://www.insurancehotline.com/ InsuranceHotline.com


    I have checked the Ontario auto policy wording and it’s not specifically excluded. You are best to double check with your insurance broker to be sure.

    Thank you

  • http://www.insurancehotline.com/ InsuranceHotline.com


    Each year that you remain accident free, your premium should decrease.

    Thank you

  • http://www.insurancehotline.com/ InsuranceHotline.com


    It all depends on who owns the vehicle. If the vehicle is registered to you then he can stay on your policy.
    If he is the registered owner of the vehicle then he should have his own policy regardless of whether he lives with you or not.


  • http://www.insurancehotline.com/ InsuranceHotline.com

    We tell people that all the time :)

  • Buffy Noble-Molleson

    My friends car got a dent in the side door while camping. No one was around. Should they pay out of pocket for the repairs or go through their insurance? Will their premiums go up?

  • http://www.insurancehotline.com/ InsuranceHotline.com


    If your friend has collision coverage then they will have to pay the deductible. Most of the time an insurance company will require a police report stating that it was a hit and run in order for it to be considered not at fault. If there is no police report then it is likely that their rate may increase as a result.

  • http://www.insurancehotline.com/ InsuranceHotline.com


    Once the tickets are off your record you may see a decrease with your current company depending upon when it renews.
    If your renewal is later, you can always shop around. You might save money with a new company even if you have to pay a bit of a cancellation penalty with your existing one.

  • http://www.insurancehotline.com/ InsuranceHotline.com


    Yes. Insurance premiums are partly based on where you live. If where you live changes during the policy term your rate may increase. Similarly if you changed your car in the middle of the policy term your premium may change.

  • http://www.insurancehotline.com/ InsuranceHotline.com


    If there is no fine to pay or no option for a court to plead guilty then there is will be no violation on your record in most cities.

  • Informed01

    Ok…so the reverse applies and your insurance company will decrease your monthly rate if the area in which you moves goes down in premiums?

  • Jackie Cameron

    How many years does a non payment stay on record before it is totally wiped clean

  • Troy

    For a minor coliision in a private parking lot, do myou have to contact tour insurance company if you are not planning on making a claim?

  • Kurious

    I was convicted of Over 80 just over 3 years ago and my insurance never went up. Has this all just been luck on my behalf? I never changed anything on it since then but now want to buy a new vehicle. I’ve seen conflicting post where its 3 vs 6 years that my rates will be affected. Does anyone know for sure? I don’t want to start making new car payments and then get a massive hike in my insurance premiums

  • Wendy Hall

    How long does driving without insurance stay on your license and can a insurance company see it after that period?

  • allan

    i accidentally backed into my spouse’s car doing minor damages to both vehicles. Will my collision coverage cover repairs to both vehicles?

  • sarah

    I was in a accident 3 weeks ago. There was no damage to the car, it was my boyfriends car. There was no visible damage to the other guys vehicle either. We exchange insurance information and licenses. He said he would have a mechanic look to see if there is a problem. Then a police officer calls me and asked for the cars information (plates, policy, ect) 48 hours later. I told her I was on my hands free driving home from work. I then asked if she could email me all the information. The officer took down my email address then said she would email me in 30 mins then hung up the phone. I never received a email. The guy then texts me and said he had the car looked at and there is 100$ in damages. So I said send me a invoice and your email and I will e -transfer the money. He said he doesn’t know how to e transfer and will go to the bank to find out. Now I haven’t heard from him or the officer. So what am I suppose to do i didn’t get a officer name and I haven’t heard from the guy in a week.

  • Steveo32

    I received a failure to yield to a pedestrian ticket (3 demerit point), which I have chosen to fight in court.
    Days later I happened to get a renewal questionnaire from my insurance company. One of the items is asking if I have any traffic violation in the last 3 years (excluding parking tickets). Do have have to say yes? Aren’t I innocent until I have my day in court?
    Or would I be doing something wrong I I put no?

  • Madlax15

    The insurance industry, the voltures and bottom feeders of society. What they will never tell you in person or over the phone is that if you hit any object on the road, it’s your fault even if you did everything you could to react in time and prevent a worse accident, this is also true if the object was left on the road by someone else. They always tell you important information after the fact, never before.

  • C M

    How will auto insurance be calculated if a person lives and works 4 days at permanent address and another 3 days lives and works 200 km away from permanent address?

  • InsuranceHotline

    Most insurance companies will calculate the rate based on which address generates the higher premium/exposure.