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How does a car accident impact my insurance rates?

Car accidents can happen to anyone; we are at the mercy of other drivers, difficult road conditions and our own personal distractions. Although we hope it never happens, it’s helpful to know what to expect after getting into an accident. Read on to find out how a car accident could impact your insurance rates and how accident forgiveness can help. 

Does it matter to the insurance company whether I was at fault?

You may have heard that Ontario has a “no fault” car insurance system. However, this doesn’t mean that you’re off the hook if you cause an accident—it means that you deal with your own insurance company if you have a claim, regardless of whose fault the accident was. So how are your premiums impacted whether you’re at fault or not? 

Good news—if you were found to be not at fault for a collision, your premiums won’t be affected!

If you are found to be at fault or partially at fault, your premiums will increase. It doesn’t matter if it was a minor fender bender in your neighborhood or a major collision on the highway, both incidents will cause your premium to increase equally if they caused damage of over $2,000, or an injury. However, as of June 1, 2016, an insurer cannot legally increase your premiums for a car accident where the damage is less than $2,000 per vehicle, no one was injured and the at-fault driver paid for repairs to both vehicles (conditions apply — for example the driver cannot have had more than one minor accident in a three year period).1 

How long will a car accident stay on my driving history and impact my insurance rates?

Typically, an accident can impact your insurance rates for up to six years. The accident will go on your driving history record, so even if you switch insurers, you will still face higher rates until six years have passed.2  

What is accident forgiveness?

If you have accident forgiveness coverage included with your auto insurance policy, your insurer will “forgive” you for your first at-fault accident, unless you were convicted of a major driving offence. This means your premiums will not increase as a result of that accident. However, the collision will still appear on your driving history record, so if you switch auto insurers, your new insurer will not forgive that accident and will charge you higher premiums as an at-fault driver. 

Typically, you are eligible for accident forgiveness coverage if you have been collision free for a defined number of years (usually six).3 Accident forgiveness coverage may be applied to cars, motorhomes and motorcycles as well, and applies even if you switch vehicles.

Depending on your insurer, accident forgiveness coverage may be offered as a part of your policy or you may have to pay extra to have it added. To learn more about your coverage or to adjust your auto insurance policy, call an OTIP broker at 1-800-267-6847. To get a car insurance quote, call 1-866-561-5559.

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1. The Globe and Mail
2. Insurance Hotline
3. ThinkInsure
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