Auto Insurance Cancelled in Ontario
If your insurance gets cancelled the reasons can vary from:
- You want to cancel the car insurance policy for whatever reason or,
- The Insurance Company cancelling you for a variety of reasons, ranging from policy violations, and nonpayment of car insurance premiums, to simply exceeding their risk profile.
Cancellation of auto insurance in Ontario from the Insurer means you do not fit the risk criteria for the regular car insurance market. This could be due to a policy violation, such as a DUI, driver’s license violation, non-payment of the insurance premium or too many at-fault accidents or tickets.
Has your Auto Insurance Company Canceled you?
Since the availability of auto insurance in Ontario, Canada is mandated and guaranteed to the consumer by law, Insurance companies are required to offer car insurance to consumers who qualify. This means the applicant cannot be denied car insurance if they meet the registered requirements that the said Insurance Company has filed with the regulatory body, FSRA (Financial Services Regulatory Authority).
Regular or Standard car insurance companies in Ontario are required by law to offer auto insurance to anyone who qualifies. But if you are considered too high of risk or do not meet the insurance company’s requirements you may need to purchase car insurance from the non-standard market.
Can an Auto Insurance Company Cancel my Policy?
Where your policy has been in effect for up to 60 days, the Insurance Company may only cancel your policy for a reason that they have filed with the Financial Services Regulatory Authority of Ontario (FSRA), formerly known as FSCO.
Where your policy has been in effect for more than 60 days, the Insurance Company may only cancel your policy for one of the following reasons:
- Non-payment of insurance premium
- You have given false particulars of the vehicle or subject of insurance
- You have knowingly misrepresented or failed to disclose information that you were required to provide in the application for automobile insurance
- The risk has changed materially
Cancelled due to Non-Payment Ontario
Getting cancelled for non-payment of your auto insurance premium is one of the easiest ways to be classified as a higher-risk driver.
The logic is that people, who are delinquent with their payment obligations or have a history of repeated missed payments or cancellations, are more likely to get into an accident or make a claim.
Whether you agree with that logic or not, being cancelled for non-payment is a definite way to end up in the non-standard auto insurance market. Also, if non-payment of your car insurance premium is the reason for the auto policy cancellation then you can also bet that your payment options will dwindle in the substandard car insurance market
How long does a non-payment stay on your insurance record?
Cancellations for non-payment stay on your record for 3 years. Having more than one cancellation for non-payment within a 3-year period will usually place you in the high-risk category and also limit your payment options.
Getting Insurance After the Cancellation
If your Insurance company has dropped you and you receive a letter of cancellation you need to find out the date when insurance coverage ends. Don’t confuse a letter of cancellation with a letter of non-renewal. The letter of non-renewal means the insurance company can’t extend your policy for another term due to not meeting eligibility. You can argue that one is more severe than the other, but not necessarily.
A letter of cancellation usually means the Insurance Company is cancelling you within the policy period, while a letter of non-renewal means they are not cancelling you, only advising that they cannot renew your auto policy.
A cancellation fee does not apply in both situations.
Non-Renewal vs Cancellation
A non-renewal letter from your auto insurance company means you no longer qualify to be insured by that insurance company. Every insurance company has a set of different rules for declining and accepting risk. However, most car Insurance companies have similar criteria to qualify or disqualify a driver from the standard car insurance market.
The non-renewal of car insurance is not an immediate cancellation and shouldn’t be confused with a cancellation letter. You can argue that cancellation is more severe as there was a reason to break the contract of insurance with you. An example would be a policy violation such as a DUI, or not being honest on the auto insurance application submitted.
If you received a letter of non-renewal from your auto insurance company the auto policy usually remains in force until the expiration period or the length of the contract. After that policy period ends the auto policy won’t automatically renew but will lapse.
Car Insurance Dropped Me Now What?
Getting dropped by your car insurance company is not a nice feeling.
The first thing is to figure out if you’re being cancelled right away or whether your auto policy is not getting renewed. As I mentioned above there is a difference between a cancellation of insurance and a non-renewal.
Either way, it’s a good time to contact an Insurance Broker to discuss your situation and options and to find the right car insurance for you.
Cancelled After an Accident
If your car insurance was cancelled, immediately after a car accident that usually implies there was a policy violation, for example:
- A moving violation such as a DUI/DWI or Driver’s license suspension
- A misrepresentation discovered after the initial automobile auto policy application
Can an insurance company drop you for too many claims?
An auto insurance company in Ontario Canada can drop you for having too many claims, but can only do so at auto policy renewal. If there is impropriety or a policy violation an auto insurance company can cancel your policy immediately, with proper notice.
Every auto insurance company has an Underwriting criterion for accepting and rejecting risk. If you do not meet eligibility due to too many claims your insurance company will not renew your car insurance.
An auto insurance company in Ontario cannot drop or cancel you for having any amount of legitimate car insurance claims unless the risk changes materially within the first 60 days from the inception of the auto policy. Sixty days after your car insurance policy begins your auto insurance company cannot cancel you for claims that are covered, only non-renew you at the anniversary date of the car insurance policy.
Can an insurance company cancel your policy without notice?
No. An auto insurance company in Ontario has to give you reasonable notice.
The Ontario Automobile Policy (OAP 1), sections 1.7.3 and 1.7.4 states:
- For non-payment of insurance premiums a 10 or 30-day notice, respectively, in person or by registered mail, to your last known address.
- If you’ve already received two notices of cancellation for non-payment within a policy term and then receive yet another notice, the auto insurance company will probably cancel you according to section 1.7.4
- Section 1.7.4 – if you received two notices under section 1.7.3, or for any other reason, you will be notified in writing. Five days if the notice of cancellation is delivered in person and 15 days when the notice is sent by registered mail to your last known address
- The auto insurance company is under no obligation to accept late payment or to keep the policy in force if you received 2 prior notices regarding nonpayment of auto insurance premium.