High Risk Insurance in Ontario, also called Non Standard car insurance, is meant to provide car insurance to licensed drivers who can’t buy regular auto insurance from Standard car Insurance companies because of their higher than average risk profile.
High risk insurance is intended for people with multiple driving or driving related violations, or a combination of the following:
1. Rateable traffic convictions
2. At fault accidents
3. Criminal convictions
4. Administrative suspensions of driver’s license
5. Non-administrative, driver’s license suspensions when driver’s license is not reinstated within 3 years
6. New Drivers
7. Non-payment history – Cancellations and NSF payments
8. Drivers who may have not had driven in a significant time period
9. Vehicles that do not meet eligibility requirements i.e. Branded rebuilt, vehicles over a certain age, usually 20 years or more
10. Any one or combination of the above or other risk related characteristics
High risk insurance in Ontario is still governed by the same auto policy that people insured through standard Insurance companies are.
The Ontario Automobile Policy (OAP 1) is the car insurance contract that has been set as the standard and approved auto insurance policy by the Financial Services Commission of Ontario.
High Risk Insurance vs. Standard Car Insurance
1. High Risk Insurance Costs More: substantially more for some.
2. Payment Options Reduced: insurance premium methods are limited since many drivers are in “high-risk” because of this reason. Be careful folks about this one: don’t assume that “just because you paid it” it should be “fine” One or more not-sufficient-funds, or NSF, within a policy term, might get you cancelled and launched into the High Risk bracket.
3. Insurance Coverage Limited: liability limits are usually limited to 1 million; higher deductibles; exclusions and specific conditions, that can affect the Policyholder, listed drivers and anyone else living in the household with a valid Ontario driver’s license.
How to Get High Risk Insurance ?
Option # 1
High Risk Insurance Brokers
There’s no distinction between an Insurance Broker that sells and services standard market auto insurance compared to a Broker or Agent that deals with High Risk auto.
Experience, knowledge and the number of Insurance companies the Agency or Brokerage represent (meaning more options for YOU) are the main differentiating factors between a “normal” car insurance Broker, and a High risk insurance Broker. These should also be the factors for YOU when making a purchasing decision.
Some Insurance Brokers specialize in different aspects of the car insurance policy, while others don’t have any experience in auto insurance, regular OR High Risk, so it’s important to know the qualifications and experience of the person or Company that you do business with.
Option # 2
High Risk Insurance Agents
Insurance Agencies in Ontario who deals with High risk insurance are few. I can only think of 2 at most that will insure high risk drivers.
If you are coming from a direct writer Insurance Company to an Insurance Brokerage, it would help you – maybe even save you thousands of dollars – to know the differences between Insurance company vs Insurance Broker vs Insurance Agent. Usually, you’d be dealing with an Insurance Broker if you need High risk car insurance.
Option # 3
Facility Association
The Facility Association is considered the last resort for car insurance if you don’t meet eligibility criteria of the High risk Insurers. Facility Association is an insurance pool that all auto insurance companies contribute and belong to, who make auto insurance available to high-risk drivers unable to find car insurance in the regular market.
Everyone licensed to drive has a legal right to get auto insurance in Ontario, but sometimes you can be considered too risky, even for the High Risk market. If you find yourself in this position and can’t afford to get car insurance, consider renting a vehicle instead.
I’ve seen quotes from the Facility Association ranging from $7,000 to $17,000 for a personal lines auto policy, so crunch the numbers and see if it’s worth to rent a vehicle instead.
Sometimes it’s cheaper to rent a vehicle for the year, or half year, compared to paying crazy amounts that the substandard market charges! Just ensure you know what you are signing and ensure the vehicle is properly insured, whether the car insurance is purchased through the rental agency or independently through an Insurance Broker.
High Risk Insurance Ontario:
1. Time Consuming – Many people are not sure where to get high risk auto insurance or who to ask for help. Think of the times you completed an online car insurance quote, only to be asked the same questions over again when calling to confirm your quoted price. Many times the quote you submit online won’t match the confirmed quote by the actual Insurance Broker or Agent
2. Industry Confusion – People that are new to driving and auto insurance do not know the difference between an Insurance Broker vs Insurance Company vs Insurance Agent. The statistic is over 50% of people do NOT know the difference! Not knowing the difference could cost you more, way more! This is especially obvious in drivers who have no experience with an Insurance Broker and have always been insured through a Direct Writer like TD, RBC, Sonnet Insurance or Desjardins Insurance Companies.
3. All Licensed Drivers in Ontario are Entitled to Car Insurance– what this means for you is that you can’t be turned down for auto insurance unless you do not meet an Insurance Company’s Underwriting guidelines. If you don’t meet the risk criteria of ALL the Non-Standard (High Risk) then the Facility Association of Ontario is the last resort. This is the LAW! The unfortunate thing is that you will never be guaranteed the lowest price if you don’t shop around.
How to Get Cheap High Risk Insurance?
Insurance Brokers use a centralized database to produce prices and quotes, but if they don’t have a business relationship or a contract to do business with that Insurance company they can’t offer that price to you! Therefore the “cheapest” quote is relative to the Insurance companies the Insurance Brokerage represent.
This means that the “cheapest” quote isn’t going to come from every Insurance Brokerage, but only the Brokerage that is authorized to do business with THAT particular Auto Insurance company.
So when an Insurance Broker says “that’s the cheapest quote” they usually refer to the cheapest price for the companies they represent! That’s why it’s important to shop around and exhaust every channel to get the cheapest and best coverage in a high risk car insurance policy.
Conclusion
High risk insurance auto policies are the same as regular or standard auto insurance contracts. The difference in risk profile can make one auto policy different or more expensive than the other.
Although the risk calculation is different for a Non-Standard Auto Insurance company compared to a Standard car Insurance company, the Ontario Auto Policy, aka, OAP 1 is still the policy that governs both. This applies to commercial auto insurance too.
The Ontario automobile Policy, OAP 1, is mandated and standardized, along with popular or MAIN endorsements or floaters of insurance, by the Financial Services Commission of Ontario (FSCO).
Buying High Risk Insurance , also known as Non-Standard auto insurance, can be a daunting task of comparing and contrasting prices, quotes, coverage, how it affects others that live in your household, and especially the aspect of affordability and payment options.
Referral checks, Better Business Bureau searches, Internet Reviews, Social Media presence and general research about the Insurance Companies, Brokerages and Agencies can help you make a better purchasing decision regarding high risk insurance Ontario.
Finding the cheapest price with comparable car insurance coverage involves shopping around, and getting quotes from ALL High Risk Car Insurance Providers.
View Peter Martire, CIP, CRM’s profile
