Toronto Injury Lawyer Blog
Last week I was interviewed by a journalist at the Globe & Mail newspaper (remember those?).
She was writing an article on car insurance, and increasing insurance rates in general in Ontario. She wanted to know what a boots on the ground personal injury lawyer was seeing.
I shared with her a few trends which I had observed over the past 12 months:
- Premiums were rising for drivers even if they had outstanding driving records with no claims
- Part of the reason which premiums appeared to be on the rise was the increase of auto thefts; coupled with the rise in prices for new vehicles, labour and auto parts. I suspect that the looming tariffs and trade war won’t help in that area. Some reports are suggesting that the price of new cars will go up between 15-25%
- But don’t fool yourself: insurance companies will find every excuse in the books to increase premiums. They will deliver less coverage, while charging you more money. You are paying more, and getting less in return.
- Our personal injury lawyers have noticed an uptick in uninsured claims.
What is an uninsured claim you might ask? Good question!
An uninsured claim is exactly what it sounds like. It means that the at fault party, or one of the parties, was operating their motor vehicle without car insurance.
Sometimes the decision to drive without car insurance is deliberate. Other times, the driver was operating under the mistaken assumption that they are insured, when in fact, they are not.
But Brian; how can this happen? How can somebody be mistakenly assume that they have insurance coverage when they don’t? Another good question!
Car insurance premiums are most commonly paid by way of direct withdrawal from the car insurer from the driver’s bank account, or by way of automatic payment from a credit car on file.
If the driver has no money in their bank account, then they cannot pay their monthly premium and coverage will be stopped.
If the driver has changed their bank account, or their account is frozen, and the insurer can’t find a way to have its premium paid, then coverage will be stopped.
If the driver has maxed out, or cancelled the credit card which the insurer has on file, then the premium cannot get paid and coverage will be stopped.
While not deliberate, you can see how easily coverage can get cancelled. I suppose you are seeing it now when economic times are tough, and people are stretched too thin for money.
Do you really need car insurance to driver a car in Ontario?
Yes you do!
Here is what the law says: Section 2(1) of the Compulsory Automobile Insurance Act (CAIA) states:
Compulsory automobile insurance
2 (1) Subject to the regulations, no owner or lessee of a motor vehicle shall,
(a) operate the motor vehicle; or
(b) cause or permit the motor vehicle to be operated,
on a highway unless the motor vehicle is insured under a contract of automobile insurance.
What is the penalty if you are caught driving without car insurance? Here is what section 3 of the CAIA has to say:
Offence
(3) Every owner or lessee of a motor vehicle who,
(a) contravenes subsection (1) of this section or subsection 13 (11); or
(b) surrenders an insurance card for inspection to a police officer, when requested to do so, purporting to show that the motor vehicle is insured under a contract of automobile insurance when the motor vehicle is not so insured,
is guilty of an offence and is liable on a first conviction to a fine of not less than $5,000 and not more than $25,000 and on a subsequent conviction to a fine of not less than $10,000 and not more than $50,000 and, in addition, his or her driver’s licence may be suspended for a period of not more than one year.
When the at fault driver does not have car insurance, the injured accident victim then has to sue a party which does have insurance in the event that it’s a multi vehicle accident. If there was not another vehicle, then the innocent accident victim has to name his/her own insurer as a Defendant in the legal proceedings. Their own insurer will defend the claim. It’s a strange dynamic. A Plaintiff needing to sue his/her own insurer for an accident which that insurance company’s driver was not at fault. But, that’s the way which the law works in Ontario.
If there is no insurance whatsoever, meaning that the Defendant had no insurance, and the Plaintiff did not have any insurance (like in the case that they’re a pedestrian, cyclist, or a passenger in an uninsured vehicle), then the claim has to go through the Ontario Motor Vehicle Accident Claims Fund (The Fund) where the limits for the claim are $200,000; instead of $1,000,000 as you would find under a standard auto policy in Ontario. It pays to have valid car insurance in Ontario, even if you’re not the at fault party.
One final question which many people have is whether or not they can change car insurers while they are still in the midst of a claim or lawsuit. Many people think that while the claim or lawsuit are ongoing, that they cannot change insurance companies. This is a common misconception. Claims and lawsuits go on for years! It would not be in the interest of the free market, or consumer protection if the consumer had to be locked in with the insurer who they made a claim with for the duration of that claim given that the claim can proceed for many years. Once the claim has been made with Insurer A, the claim is crystalized with Insurer A. This does not prevent the customer from seeking out new rates, and new coverage with another insurer. The claim with Insurer A will not change, nor will it be prejudiced simply because the customer has decided to change insurance companies after the claim has been made. So, the simple answer is that if you’re not happy with how your current insurance company has treated you over the course of your claim, you can change insurers without prejudicing your claim, even before that claim has ended. Your new insurer will indemnify you on future claims from the date you sign up with them. You have the freedom of choice, even if you have an active claim with another insurance company.
