A high risk auto insurance policy 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.
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High-risk auto 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 a 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 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 auto 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 Regulatory of Ontario, formerly, the Financial Services Commission of Ontario (FSCO).
High Risk Auto Insurance vs. Standard Car Insurance
- High-Risk Auto Insurance Costs More: substantially more for some.
- 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.
- 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 Auto Insurance?
High Risk Insurance Brokers:
There is no distinction between an Insurance Broker who 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.
High Risk Insurance Agents:
Insurance Agencies in Ontario who deal 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 difference between an Insurance company vs Insurance Broker vs Insurance Agent. Usually, you’d be dealing with an Insurance Broker if you need High risk car insurance.
Facility Association:
The Facility Association is considered the last resort for car insurance if you don’t meet the 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 renting a vehicle instead.
Conclusion
High risk auto insurance 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 high risk 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.