Starting June 1, 2016 Ontario car insurance has implemented several changes with the goal to make policies more affordable. The reforms adjust some coverage options and modify criteria for assessing new or renewal premium amounts to offer some leeway to the insured and avoid rigid penalization for minor acts of non-compliance. One such change was made to minor "at-fault" accident provision.
Minor "At-Fault" Accident
While filling out a car insurance application, you will notice there is a specific question that all brokers or insurance company ask, it reads something like this.
"
Give details of "all accidents" and claims paid or outstanding arising from the use of any automobile by the applicant during the last 6 years.
BI-Bodily Injury PD-Property Damage DC-Direct Compensation AB-Accident Benefits AP-All Perils Coll-Collision Comp-Comprehensive SP-Specified Perils
How do you answer?
You are expected to disclose all accidents and claims in the last 6 years. These include even minor accidents where you are at fault. While listing these accidents and claims, you need to bear in mind one important change that occurred from June, 2016 onwards.
According to the changes implemented by Financial Services Commission of Ontario,
"Insurers can no longer use a minor at-fault accident that occurs on or after June 1, 2016 meeting certain criteria to increase your premiums. The criteria include that no payment has been made by "any insurer", that there are "no injuries", and that damages to each car and property were less than $2,000 per car and were paid by the" at-fault driver". This provision is limited to one minor accident every three years."
This reform came into force from June 1, 2016. Let's break it down to understand what minor "at fault" accident means.
Definition of "minor accident"
An accident qualifies as minor when:
1.there were no injuries,
2.the insurer did not have to make any payouts
3.the damage was less than $2000 per car
It means that now the situation is more under your control than before. Say you happen to have a minor accident with a third party and you are "at fault." If the damages to the other vehicle is less than $2,000, if there is 'no injury' involved, if you pay for repairs for your car as well as the third party's car, it will not be held against you while considering your subsequent insurance premium amount. It is also important that the minor accident has not taken place before in the last three years.
An important reminder: Always pay the repair shop directly and retain the receipt of payment.
Conclusion
This important move by FSCO aims to protect the insured from any negative impact on their overall rating and facing the brunt of heavy insurance premiums even in case of minor accidents. Ontario has one of the highest car insurance premium rates in Canada. With this attempt, FSCO wants to make insurance policies more affordable to Ontario residents. If you have had a minor accident and are unsure about how this could affect your rating, check with your insurance broker. He should be able to give you a fair idea. In any case, always make sure you keep up with the important changes to your premiums.
