Whether you are driving a shiny new car off the lot or found a used car in good shape on an auto buy-and-sell page, you’ll need to notify your insurer before you write the cheque. The make, model and year of your vehicle are key factors in determining your auto insurance policy premiums and ensuring that you have the right amount of coverage in place. That’s why it’s so important to contact your insurance provider before you purchase a new vehicle. Depending on the make, model and year of your new vehicle, keeping your insurer updated could save you on your insurance premiums.
Read on to learn why it’s important to keep your insurance provider in the loop:
1. It’s the law
In Ontario, auto insurance is mandatory.1 All vehicles registered in the province must be insured for third-party liability of at least $200,000. While collision insurance to cover your own vehicle in the event of an accident is not required by law, it is also highly recommended. In order to register a vehicle or renew your registration, you will need to prove that you have sufficient insurance coverage. Falsified documents could result in fines up to $25,000, a driver’s license suspension for up to one year and confiscation of your vehicle for up to three months. It’s important to work with your insurance provider early in the buying process to ensure your new vehicle is covered and meets provincial insurance requirements.
2. Avoid being left without coverage
It is ultimately your responsibility to inform your insurer of a change in car ownership within a reasonable period of time. If you become involved in a collision after your insurance provider’s grace period has ended and you neglected to tell them about the ownership change, you risk being left without coverage. In the unfortunate event of an accident, your insurer could refuse your claim or even cancel your policy if they were not notified of the change in car ownership.
3. You could save on your premiums
There are a number of factors that your insurance provider takes into consideration when calculating your premiums. Details such as the make, model and year of your vehicle, average repair costs, safety ratings and theft rates are all taken into account. Depending on how your new vehicle compares to your previous one, it’s possible that your insurance premiums could decrease.
Overall, it is in your best interest to notify your insurance provider early in the vehicle buying process. Not only are you required by law to have your vehicle insured, but your insurance provider will work with you to ensure you have the right amount of coverage should an incident occur.
Getting ready to buy a new or used car? Contact your OTIP insurance broker today at 1-800-267-6847 to get a quote. If you have an existing OTIP car insurance policy, call 1-866-561-5559 to discuss adding a new vehicle to your policy.
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1. Ontario Ministry of Transportation