A common assumption is that insurance premiums are going to go up after an accident. It is a conclusion that many people come to.

It, of course, is one of the major concerns for any driver. Many drivers will take as much insurance coverage as they can afford. It is to give them the protection they need. In any event, any Canadian driver has to have basic insurance coverage.

What Does Basic Insurance Cover?

propety damage

The basic insurance coverage that is mandatory has different components.

Third Party Liability

It is the type of insurance that covers a driver in regards to expenses for property damage. Plus, injury including death. The minimum amount of coverage that anyone can have to drive in Ontario is $200,000.

Accident Benefits Coverage

Quite often as a result of an accident individuals need extra money to cover expenses. It can be for extra medical care or rehabilitation. It can also be to give a percentage of one’s income as a result of them not being able to work.

Uninsured Auto Insurance

There are times when drivers get into accidents that have no insurance coverage. Even though it’s mandatory. There are also times when a hit and run accident occurs. The uninsured automobile insurance is there to protect those who are in this type of accident. That are now going to face most likely many different expenses. It also covers benefits for those that have lost someone resulting in death. As a result of the accident.

Direct Compensation and Property Damage Insurance

If the accident is at the result of someone else’s fault this part of the insurance protects the non-at fault driver. There are some criteria that is in place for the coverage for this type of insurance.

How Much Does Insurance Cost?

How much insurance is going to cost in Canada depends on the Province that one lives in. It also depends on many different metrics and statistics. Ontario insurance is well recognized for being expensive. It’s estimated that the average cost of insurance in this province is around $1,920. per year.

How Much Will my Insurance Go Up in Case of Accident?

Many individuals expect that their insurance is going to go up once they’re in a collision. They assume this even if they are not at fault. There are many times that there is an accident and it’s called a no-fault accident. But when it comes to the insurance companies fault is allocated to one or both drivers.

Meaning that the insurance company has to decide who is at fault and for what percentage. They do this by following a format that is designed by the governing bodies of the insurance. This is going to be the big factor that determines what’s going to happen with the insurance rates.

No-Fault

Sometimes the driver is not found to be at fault. When this happens, the premiums are not usually affected.

At Fault Percentage

At the time the fault belongs to both drivers. The insurance company determines this through their investigation. The fault is by percentages.

The percentage of fault the insured driver has, dictates the insurance increase. There is no definitive amount or answer as every insurance company is different.

Totally at Fault

Those at 100% fault can expect a significant increase in premiums. But there are going to be a lot of variables considered to determine the premium increase.

In most cases of the increase comes at the time for the renewal of the policy.

Can I Do Anything About the Increase?

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The first thing to do is to discuss the situation with the insurance company. If one does not believe that they are at fault there are some steps they can take. They can talk to the head of the claims department of the insurance company. So they can put forth their reasoning to why the insurance company is wrong. The insurance company may not agree. The next step is for the individual to take their case to the insurance ombudsman’s office. They will review the case and give their opinion on the matter their opinion is not binding.

If one is still not satisfied, then it can go to arbitration where this can be binding.

An individual has to think about what stand the insurance company is making. They have a strict format that they must follow for determining at fault. The original insurance premiums may have been high, to begin with. The increased rates are now adding to the extra cost.

It is one of the reasons why individuals need to shop carefully for their insurance. Having a good rate, to begin with, makes it easier if there is a reason for an insurance premium increase.

Also taking advantage of whatever discounts are available are well worth the effort. All too often individuals take their insurance costs lightly. They may not like what they’re paying for insurance. But they are not proactive in determining if they can lower the costs. If they don’t do this, they get hit with an in an increase in premiums.  When this happens, it can be overwhelming for them.

Insurance Planning

Insurance is all about planning ahead. The whole purpose of insurance is on a what if factor. The what if is the many things that can go wrong when driving a car. It is for this reason that many people consider an extra amount of coverage. Coverage that goes beyond the basic insurance that they must have. This same way of thinking should be utilized when one is shopping for insurance. Considering that there is a possibility that a collision could occur is one thought. The other thought is that the individual may be responsible. Meaning the premiums are going to go up. Starting with a lower rate is going to take the sting out of this.

Primary Drivers

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The primary driver when it comes to insurance is going to be the main driver of the vehicle. As such they are the most important to the insurance company. It means that the insurance companies are going to scrutinize this driver. They will use every metric that they would normally use when setting premiums. Many of the metrics pertain to the driver. But they also use other statistics and ways of determining what a premium should be. It will include factors such as where a one lives and also some statistics about the vehicle.

Knowing what affects vehicle insurance premiums can help an individual. It can help them make wise decisions about their coverage.

Resources

https://www.myinsurancebroker.com/insurance/car-insurance/resources/what-is-the-mandatory-car-insurance-in-ontario/
https://www.thinkinsure.ca/insurance-help-centre/at-fault-accident-and-impact-on-car-insurance.html
https://www.cooperators.ca/en/Answer-Centre/why-do-premiums-change/how-does-at-fault-accident.aspx