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High Risk Auto Insurance Ontario – FAQs
Why is high risk insurance so expensive?
The logic is that the probability and frequency of the insurance company having to pay out on a claim associated to a driver with many traffic tickets, driver’s license violations, at-fault accidents, history of cancellations for non-payment, or any combination of the above, is a lot higher compared to a driver with a driving and payment record that is much cleaner.
Which Insurance companies cover high risk drivers?
In Ontario, there are only a handful of high risk insurance companies who cover high risk drivers. The following is a complete list of high risk insurance companies in Ontario:
- Jevco Insurance: Jevco is a subsidiary of Intact Insurance.
- Perth Insurance: Perth is a subsidiary of the Economical Insurance
- Pafco Insurance: Pafco is a subsidiary of Allstate Insurance
- Echelon Insurance: Echelon is a subsidiary of CAA Insurance
- Portage Mutual Insurance: headquartered in Portage La Prairie Manitoba
- Pembridge Insurance: a division of All State Insurance
- Intact Insurance: a well-known brand in personal lines insurance. Intact focuses on commercial high risk auto.
- Coachman Insurance: Coachman is a subsidiary of SGI ( Saskatchewan General Insurance)
- Facility Association: Facility is essentially a risk-sharing pool for high-risk drivers that are TOO high risk for ALL the High Risk Insurance Companies. Facility is often referred to as the option of last resort.
Who has the cheapest high risk auto insurance in Ontario?
Affordable high risk auto insurance is easy to find if you know how the process works. This question should be rephrased with “HOW TO GET THE CHEAPEST HIGH-RISK AUTO INSURANCE?”
Not all High-risk car insurance companies OR high risk insurance brokers are created equally. There isn’t solely, one company or brokerage that offers the cheapest high risk auto insurance quote.
Auto insurance rates are standardized in Ontario through a regulatory body, Financial Services Regulatory Authority (FSRA), which means:
you can get the same quote from several Insurance brokerages who deal with the same high-risk car insurance company
not all brokerages can offer prices from ALL high-risk insurance companies; this depends on how many distribution agreements with high-risk insurers your insurance brokerage has.
cost of high risk auto insurance has to be authorized by FSRA
rules for accepting or rejecting risk also have to be authorized by FSRA
The cheapest high risk auto insurance is relative to the insurance broker you use to purchase it. This means that not every insurance brokerage will have a working relationship with the high risk insurance company that’s quoted the cheapest. You would need to find an auto insurance broker that has a distribution channel with that insurer. Ideally, you’d want to choose an insurance broker with access to ALL insurance companies so your bases are covered.
How is high risk auto insurance calculated?
High-risk auto insurance is calculated very similar to standard auto insurance. The method to calculate the cost of car insurance is generally the same for high-risk insurance companies compared to regular or standard companies, however, insurance premiums may vary depending on the company and their eligibility criteria.
How your vehicle is rated. Based on the CLEAR rating system. i.e. how likely injuries and extent of physical damages would result from a car accident based on the type of vehicle or statistical findings around the make and model of a vehicle.
How you use the vehicle, i.e business, commute or pleasure, kilometers driven
Your postal code or territory in which you operate the vehicle
What criteria is used for rating high risk drivers in Ontario?
The criteria used to rate high risk drivers is similar to the critera used by standard auto insurance companies.
High-risk insurance companies use a risk point and surcharge system to determine the cost of your premium. Risk points, otherwise known as insurance points, are violation markers on your driving record for traffic violations and at-fault accidents.
Risk Points and surcharges are allocated according to the severity of driving violation.
The violations are broken down into groups. (This is just an example; every High Risk Insurance Company is slightly different.)
Minor Convictions – 1 Point: 20% surcharge for first conviction, 25% surcharge for each additional conviction
Major Convictions – 2 Points: 40% surcharge for first conviction, 50% surcharge for each additional conviction
Serious/Criminal convictions – 4 Points: 50% surcharge for first conviction 100% for each additional conviction
Cancellations: gaps of continued auto insurance resulting from lapses due to cancellations are factored into the premium. Cancellations for non-payment also determine the payment options that can and can’t be offered.
For a driver licensed less than four years, insurance points attaching to a conviction are doubled
How to get the cheapest high risk auto insurance in Ontario?
Many Ontario drivers have never dealt with an Insurance Broker, but rather direct insurance agents like TD, RBC or any insurance company that sells directly to the consumer public.
Ontario drivers who are forced to look for auto insurance in the high risk market may not know the difference between an Insurance broker vs insurance agent. High-risk auto insurance is exclusively sold by licensed registered insurance brokers. If you’ve never dealt with an Insurance Broker the lack of experience may cost you!
In Ontario, Canada insurance rates are regulated and standardized, meaning the prices for car insurance, whether it’s high risk or not, cannot vary for a specific insurance co. from one Insurance Brokerage to another. However, not all high risk insurance brokers have distribution agreements or contracts to sell from ALL insurance companies. This could mean that not every broker can offer you the cheapest car insurance quote. Think of an Insurance Broker as someone that will try and get the best auto insurance quote from most or all insurance companies.
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 represents.
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.
If you want the cheapest high-risk car insurance you need to shop around for the Best High Risk Insurance Brokerage with distribution channels from ALL High Risk Insurance Companies!
How much does high risk insurance cost in Ontario?
The cost of High-risk auto insurance in Ontario varies depending on the high risk driver and the high risk auto insurance company. However, a good rule of thumb is to expect your car insurance premium to double in cost.
High-risk auto insurance policies range in price from as little as roughly $1,000 to as much as $10,000! The cost of high risk insurance depends on many factors.
Auto insurance companies calculate your premium by:
- Assessing the high-risk driver, i.e. traffic tickets, at-fault accidents, and driver’s license moving violations.
- the subject of insurance (a type of vehicle)
- How you use the vehicle: i.e. business or personal use, commuting, kilometers driven
- Territory (Postal Code)
- Regulatory change
- Changing economic and market forces
As you can see many factors determine the calculation of your auto insurance premium. Even though an average cost for high-risk car insurance could be obtained with statistics, it wouldn’t be a fair or an accurate reflection of what you might have to pay. The best thing is to contact a high risk insurance broker directly for a high risk auto insurance quote.
What’s the difference between a high risk insurance Company and an Insurance Broker?
There are differences between a High Risk Insurance company and an Insurance Broker that you should know! They are not the same thing!
- Insurance Brokers are independent ( in most cases) from the Insurance Company
- Insurance Brokerages are the distribution channel for High Risk Auto Insurance Companies
- High Risk Auto Insurance Companies will not sell directly to the public as they are not licensed
- Insurance companies administer and service claims, not Insurance Brokers (some exceptions apply where a company would allow the Brokerage to service some claims, but the Insurance company has the final decision)
- Insurance Brokers are independent insurance professionals that represent your best interest. This compared to companies like RBC, TD insurance who are considered “direct writers” and represent the interest of the company. This isn’t to say they don’t have a fiduciary duty, but in a time where a claim is submitted, you have no recourse to an independent source, if something goes wrong, or simply disagree with a claim decision. An Insurance Broker will fight for you in that situation and among other things.
The relationship between an insurance brokerage and an insurance company is based on a business partnership (not in the legal sense). Think of an Insurance Broker almost like a Mortgage Broker, where they try and find the best rates from multiple lending companies for you. An insurance broker does the same but finds the best coverage and insurance costs from multiple high risk insurance companies.
High-risk auto insurance companies do NOT sell directly to the consumer. Instead, High-risk insurance companies use high risk insurance brokers to market and sell their products. Also, Insurance Brokers are licensed to sell insurance to the public, whereas high risk insurance companies do not.
The complexity and nature of the risk require the professionalism and experience of a High Risk Insurance Broker.
The High-risk auto insurance market in Ontario, Canada is small and usually always tied to a Parent company that offers regular or standard auto insurance. This means that Insurance companies will start a subsidiary company to offer high risk auto insurance, so they can separate standard auto from high risk auto business. This is done for business, regulatory and accounting purposes. Also, it wouldn’t be fair for drivers who are not considered high-risk to be lumped together with a higher risk profile driver, since the losses of the few are paid by all policyholders. This is simply not fair.
How to find the best high risk auto Insurance Broker in Ontario?
- Find an insurance brokerage that’s able to provide car insurance quotes from ALL high risk insurance companies. This means that the Broker has distribution agreements with the respective high risk insurance companies and allowed to sell their product. The more high risk insurance companies the broker represents the better your chances of securing the cheapest price. However, price is not the only thing to consider!
- Being insured through non-standard auto insurance shouldn’t be an indefinite scenario and most drivers are always looking forward to entering back into the regular market. A good Insurance broker will help you transition back into the regular car insurance market where prices are cheaper, insurance coverage is better and payment options are less stringent.
- An Insurance Broker should always try and find the best and affordable car insurance for you. Insurance brokers call this remarketing which involves searching for a better price with comparable insurance coverage on policy renewal or when a traffic violation, accident or anything else fall off your driving record that could save you money off your auto insurance premium.
- You also want an insurance broker that’s going to ensure that any claim you have will be handled fairly. A good insurance broker should be proactive about your insurance claim and addressing issues and concerns with you and your claim adjuster. Remember, an Insurance Broker works for you rather than an insurance company and usually make a positive difference to the settlement of your claim.
- Finding the best high-risk insurance broker involves shopping around for an Insurance broker that will offer you more than just the best insurance coverage for the best cost. Auto insurance in Ontario is very expensive, which makes cost the number one factor when considering the insurance brokerage you choose. But some Ontario drivers want more than just cheap insurance from their insurance provider and insurance broker.
Additional things people may be looking for in a brokerage:
You may be looking for the most competent or someone that can treat you with the utmost customer service and peace of mind. After all, insurance is about having peace of mind.
How do I find the best high risk insurance in Ontario?
Shopping for the best high risk insurance company depends on your insurance requirements. Every auto insurance company is slightly different and one company could be a better fit than others.
Things to consider when finding the best high risk insurance company for you:
- Cost of High Risk Auto Insurance: The cost of high risk insurance is probably the single most important factor when purchasing car insurance for high risk drivers. High-risk auto insurance is not cheap and factoring the cost can easily supersede any other criteria you might have in making a purchasing decision. However, the cheapest high risk auto insurance may not be the best!
- Auto Insurance Coverage: Many high risk auto insurance companies will limit particular car insurance coverage compared to standard market companies. Liability coverage is a great example as some high-risk car insurers will only offer one million in liability coverage.
- Customer Service: Customer service is an important consideration when buying high risk insurance. Picking a company that you know may be better at handling claims may sway your decision towards one company over the other.
- Other Drivers in the Household: Consideration of other drivers in the household is another reason why some drivers choose one insurance company over others. A perfect example is when an auto insurance company wants to exclude a member of the household from your auto policy, usually for not meeting the eligibility criterion. Some Insurers will waive this requirement if the high risk auto insurance company of the policy in question is insured through the high risk company’s parent company. Buying High-Risk car 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.
- Background Checks on High Risk Insurance Companies: 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.
What is the best insurance company for high risk drivers in Ontario?
The best insurance company for high-risk drivers is one that can accommodate your risk profile (including other licensed drivers in your household), provide good insurance coverage at a reasonable cost, maintain superior communications, customer service and competent claims handling.