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FREQUENTLY
ASKED QUESTIONS ON CAR INSURANCE
•Since
auto insurance is regulated by the province, aren't all policies
the same?
•What is the difference
between Comprehensive and Collision coverage?
•My car was "totaled"
even though it was still driveable. How was this decision reached?
•My
car was damaged by excessive rainfall - it was parked in three feet
of water long enough to be completely ruined. Am I covered?
•Do I need to buy extra
coverage when I rent a car?
•Am I covered while driving
a car in Europe or Mexico?
•Do I have to obtain an
estimate at the insurance company's preferred shop?
•If my vehicle is involved
in a hit and run accident, how does my deductible apply?
•What are the limitations
of the OPCF# 20 ( Rental Car Coverage)? Do I have this coverage?
•Once I have established
that the OPCF# 20 ( Rental Car Coverage) applies to my damaged automobile,
when can I pick up a rental vehicle?
•What happens if I accept
a cash settlement for my vehicle damages?
•How does an at-fault accident
affect me?
•Who determines fault after
an accident?
•How
does my insurance company assess fault?
•How do Highway Traffic
Act charges or convictions affect the insurance company's decision?
•What can I do if I disagree
with my insurance company's assessment of fault?
•Under what circumstances
will insurance companies reconsider or revise their determination
of fault?
•Suppose I lend my car
to a friend, is he/she covered under my automobile insurance policy?
•Why does the premium for
my automobile insurance go up if I have an accident or if I get
a ticket?
•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?
•Can Seat Belt Violations
Affect My Automobile Insurance Premium?
•What is Graduated Licensing?
•Under what conditions
is a Pre-Insurance Vehicle Inspection required?
•What are the objectives
of the pre-insurance inspection program?
•When should vehicle pre-
inspections be carried out?
•Who pays for the vehicle
pre-inspection?
•What does the vehicle
pre-inspection include?
•Which vehicles do not
require insurance pre-inspection?
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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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*.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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