Insurnace FAQ

Since auto insurance is regulated by the province, aren't all policies the same?

Automobile Insurance in Ontario has been standardized by the provincial government through the Financial Services Commission of Ontario (FSCO). The FSCO has mandated minimum standard limits of coverage for all policies. You do have the option to increase your coverage and deductibles from these minimum limits. In addition, the price and service offered can vary widely.



What is the difference between Comprehensive and Collision coverage?

Collision covers damage to your car from collisions with any object. Comprehensive covers damage from such things as vandalism, theft, fire, flood and storm damage.



My car was "totaled" even though it was still driveable. How was this decision reached?

If the cost to repair your car is higher than its book value, an insurance company must "total" your car and pay you for its book value. The book value is determined by the age, options and condition of your car before the accident.



My car was damaged by excessive rainfall – it was parked in three feet of water long enough to be completely ruined. Am I covered?

Yes. Flood damage is covered under the comprehensive part of your policy, minus your comprehensive deductible.



Do I need to buy extra coverage when I rent a car?

Know before you go! You don't want to buy duplicate coverage, especially at the rates that rental companies sometimes charge, but be sure you know exactly what your insurance company does and doesn't cover. For instance some companies cover your rental car, but only if yours was damaged in an accident. Some credit cards will cover your rental, but again with limitations and stipulations.



Am I covered while driving a car in Europe or Mexico?

No. The Ontario Automobile Policy applies only in the U.S.A. and Canada. Coverage can be purchased for Mexico at an additional premium.



Do I have to obtain an estimate at the insurance company's preferred shop?

You may choose to have your automobile repaired at a licensed repair shop of your choice. However, the estimate for the repairs must be completed by a Designated Appraisal Centre (DAC). The maximum amount allowable will be based on this estimate.



If my vehicle is involved in a hit and run accident, how does my deductible apply?

When your vehicle has been hit by an unidentified third party, your collision or all perils deductible stated on your declaration page will apply.



What are the limitations of the OPCF# 20 (Rental Car Coverage)? Do I have this coverage?

If you have this coverage, it will be indicated on the Certificate of Automobile Insurance for the vehicle it applies to.



Once I have established that the OPCF# 20 (Rental Car Coverage) applies to my damaged automobile, when can I pick up a rental vehicle?

If the OPCF 20 applies to your damaged automobile, you are entitled to a rental on the day your vehicle is scheduled for repairs. If you vehicle is not driveable due to the damages, you will be entitled to the rental car immediately.



What happens if I accept a cash settlement for my vehicle damages?

If you accept a cash settlement, OTIP/RAEO will require proof that the repairs to your vehicle are completed within 30 days of the settlement. In some cases, a safety inspection may also be required.



How does an at-fault accident affect me?

The degree to which you are at-fault affects the amount you will receive from your insurer to repair your vehicle. For example, if you are 50% not at fault, 50% of the repair cost would be paid under your Direct Compensation Property Damage coverage (less 50% of your deductible, if any). You must have collision coverage to claim the other 50% of the repair cost (less 50% of your deductible).

Generally, insurance companies will increase your premiums, at your next renewal date, if you have been deemed to be fully or partially at fault in an accident.



Who determines fault after an accident?

After a car accident, it is often not clear who was at fault. However, insurance companies must determine the degree of fault to be assigned to each driver for purposes of determining which coverage applies to the accident, and to ensure that the at-fault vehicle's premiums are adjusted appropriately.



How does my insurance company assess fault?

After you report an accident to your insurer, the company will investigate the circumstances of the accident and then make a liability decision based on the Fault Determination Rules. The Fault Determination Rules were established by the government to help insurance companies provide consumers with prompt, cost effective claims handling and consistent treatment. The Fault Determination Rules are a regulation made under the Insurance Act and cover more than 40 accident situations, using diagrams to illustrate specific occurrences. Certain charges arising out of an accident, such as driving 16 km over the speed limit, or driving while impaired, require insurers to assess the accident in accordance with the ordinary rules of law*.



How do Highway Traffic Act charges or convictions affect the insurance company's decision?

According to the regulation, the Fault Determination Rules must be applied without regard to such things as road or weather conditions; visibility or the point of impact on the vehicles. As well, determinations on fault are made independently of decisions made by police officers to charge a driver. A charge under the Highway Traffic Act does not necessarily mean that the person charged was "at fault" for insurance purposes. In the same way, a lack of charges does not mean that no one was at fault. For example, if a car was unable to stop on an icy road and rear-ended another, a police officer may have told the parties that "no one was at fault". This comment relates to the laying of charges and should not be taken as an opinion with respect to the Fault Determination Rules for purposes of dealing with an auto insurance claim. In this case, the insurer would apply the Fault Determination Rule which indicates that a car that rear-ends another is at fault.



What can I do if I disagree with my insurance company's assessment of fault?

You may be dissatisfied with an insurer's decision on liability and believe that the decision does not accurately reflect the circumstances of the accident. In such cases, you have the right to challenge the insurer's decision in court. If the matter comes before a court, it will be decided based on the ordinary rules of law and not the Fault Determination Rules. Usually, these matters can be dealt with in small claims court.

Before deciding whether or not to pursue the matter in court, you should speak to your insurance representative, and find out how your rates will be affected by an at-fault accident.



Under what circumstances will insurance companies reconsider or revise their determination of fault?

Generally, an insurance company will revise or reconsider its decision on fault, only if additional, relevant information is provided. For example, if an accident occurred in which each driver stated that the other driver had gone through a red light, an insurance company would have little choice but to assign 50/50 fault. However, if an eyewitness confirmed which driver went through the red light, an insurance company could review its decision. Any new information should be brought to the attention of the insurance company. If you have independent evidence which your company refuses to review, then you should proceed through the company's complaint handling protocol. See "Complaint Resolution: The Role of the Insurance Ombudsman" on the Consumer Complaints page of this website. Occasionally, after investigating an accident, an insurer may realize that the Fault Determination Rules may be contrary to the ordinary rules of law. In an effort to be fair in that particular case, an insurer may apply the law and not the Fault Determination Rules, rather than putting its customer to the time and expense of a trial.



Suppose I lend my car to a friend, is he/she covered under my automobile insurance policy?

Whenever you knowingly loan your car to a friend or an associate, he or she will be covered under your automobile insurance policy. In fact, even if you do not give explicit permission each time a person borrows your car, they are still covered under your automobile insurance policy as long they had a reasonable belief that you would have given them permission to drive the car.



Why does the premium for my automobile insurance go up if I have an accident or if I get a ticket?

Actuaries and statisticians who have studied the claiming behavior of people involved in accidents have long known that people who have either had an accident or received a ticket recently are more likely to have another accident in the next couple of years than people whose recent driving record has been incident free.

Insurance companies use this information not to punish people who have had an accident, but to charge them the premium that most accurately reflects their likelihood of having an accident. People who are more likely to have accidents should reasonably be expected to pay higher premiums.



My teenager just got a driver's licence and the insurance rates are through the roof. Do I have to add him/her to my policy? Do I have any other options?

It usually makes good financial sense to add your teen as a driver to your existing policy. Even though your rates will go up overall, they'll still be lower than if your teen were to take out a policy on his or her own. If they do not own their own car they will be added to your policy as an occasional driver. Your son or daughter is also eligible for graduated licensing discounts and driver training discounts. Make sure to ask your customer service representative about these discounts.

If your child goes away to college or university and the car stays at home, you are eligible for a 40% discount off of their premium, provided that the college is more than 100 miles away.

In general, it's best to let OTIP/RAEO (1-800-267-OTIP) know right away when your teen gets a driver's licence. Your insurance company could deny the claim if your teen gets into an accident, based on the grounds that you didn't inform them of the new driver.



Can Seat Belt Violations Affect My Automobile Insurance Premium?

YES ! Driving convictions, including seat belt infractions, may affect your rating in several ways depending on the number and type.

To be eligible for our "six star" preferred rating plan, you must have a clear record or no more than one minor driving conviction. Additional convictions will result in the loss of the preferred status and the discounted premiums. So, in addition to the fine you pay, your insurance costs can go up.



What is Graduated Licensing?

New drivers in Ontario must go through the Graduated Licensing system before they can get a full driver's licence.

The Graduated Licensing system is divided into two levels, Level 1 and 2. Each level requires a minimum of twelve months experience before an individual can take the road test for a full licence in Ontario. However, if the new driver completes a recognized driver education course at a driving school, the first road test can be taken after only eight months in Level 1. In addition, OTIP/RAEO offers discounts to drivers who have successfully completed driver training school from an approved driver training school.



Under what conditions is a Pre-Insurance Vehicle Inspection required?

Effective January 1, 1997, Ontario law has required insurers to inspect certain vehicles before insuring them, notably vehicles newer than ten years old:

· being insured with a company for the first time; 
· for which insurance is being renewed within three years of initial coverage by the insurer; or
· if the policyholder has been a client of the broker/agent for less than five years.



What are the objectives of the pre-insurance inspection program?

· to reduce fraudulent insurance claims that have been made for "phantom" vehicles (where a person insures a vehicle that does not exist and subsequently claims that it was stolen)
· to determine non-existing equipment and accessories 
· to document pre-existing damage often as a result of a previous accident when damage was not repaired

This will benefit all consumers. Reduction in the monies paid out for fraudulent claims will reduce the need for premium increases by the insurance company. Consumers will benefit in the cost of insurance.



When should vehicle pre-inspections be carried out?

Within 10 days of insuring the vehicle at a time and place reasonably convenient to the customer.

Who pays for the vehicle pre-inspection?

The insurance company.

What does the vehicle pre-inspection include?

It includes photographs of the front, rear and sides of the vehicle and a record of the identification number (VIN) on the vehicle's compliance label.

The inspection is a visual and photographing inspection only. It does not deal with vehicle safety inspections required by the Ministry of Transportation. The inspectors normally would not have the qualifications to access the mechanical and safety features of the vehicle. Their purpose is to verify that the vehicle exists and to record its condition to prevent insurance fraud.

Which vehicles do not require insurance pre-inspection?

· private passenger vehicles older than 10 years 
· commercial vehicles 
· public vehicles e.g. bus 
· motorcycle or motor assisted bicycle 
· an off-road vehicle 
· motor homes 
· camper units

Inspecting vehicles will help ensure that the car described on paper really does exist so honest policyholders will not be paying for those who want to cheat the system.