The cost for High risk 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 polices range in price from as little as roughly $1,000 to as mush 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 (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 there are many factors that 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.
How High Risk Auto Insurance Is Calculated?
High risk insurance companies use similar rating models as standard auto insurance companies. 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 Are Used for Rating High Risk Drivers?
The difference between high risk auto and standard auto insurance rests on how the high risk driver is rated. It’s common sense that driving behaviour be the differentiating factor for assessing risk and insurance premium rating, as high risk drivers usually have more driving violations compared to Ontario drivers in the standard auto insurance market. There are few exceptions to this rule, one example is trying to insure a vehicle with a salvage brand. In this case it’s not the driver but the subject of insurance that would force you to look at the high risk auto insurance market, as they are the only companies that may even consider insuring a vehicle with a branding of salvage.
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
Why is High Risk Auto 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.
Who Has the Cheapest High Risk Auto Insurance?
Affordable car insurance for high risk drivers is easy to find if you know the process. 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, FSCO, 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 are able to 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 FSCO
- rules for accepting or rejecting risk also have to be authorized by FSCO
The cheapest high risk auto insurance is relative to the insurance broker you use in order 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.