The short answer is yes, an insurance company can deny you coverage, but it’s an incomplete answer. The Financial Services Commission of Ontario, overseer of insurance products for the province, posts the Auto Insurance Consumers’ Bill of Rights that covers both a consumer’s rights and responsibilities. Since car insurance is mandatory in Ontario, as it is in all provinces, while an insurance company can deny you insurance coverage, the car insurance industry as a whole cannot.
Auto Insurance Bill of Rights
Key provisions of the Bill of Rights regarding denial of insurance include:
- You have the right to purchase auto insurance coverage
- You have the right to be given written reasons if you have been denied auto insurance
- You have the right to keep your policy in place if you pay your premiums and meet the responsibilities
- You have the right to be informed in writing if your policy is not being renewed
As you can see, you can’t be denied insurance without receiving reasons why, in writing, nor can a company cancel or deny renewal without informing you why. On the flip side, you have certain responsibilities to maintain to assure you’re eligible to receive consideration of these rights. By purchasing car insurance, you implicitly agree to:
- Pay your premium in a timely manner
- Alert your insurer of changes in circumstances that might affect your insurance status, including accidents, even if you are not making a claim
- Update information at your insurer’s request
How Insurers Underwrite Your Policy
Every insurer uses their own underwriting rules and guidelines. These must be filed, reviewed and approved by the FSCO before these can take effect, and, once in place, a company cannot use different rules or standards to deny you coverage.
Though rules vary by company, common rules that permit a company to deny coverage include:
- Drivers on a policy exceeding a certain number of traffic offense convictions or at-fault accidents
- Repeated policy cancellations due to non-payment
- A history of providing incorrect or incomplete information to insurers
There are some rules that insurance companies cannot use to deny someone insurance. Rules of this nature will not be approved by the FSCO and run contrary to the Insurance Act of Ontario. These include denials based on:
- Credit history
- Physical or mental disability
- Where you live
- Whether you are new to Canada or newly licensed to drive
Note, however, that the conditions of each of these rules may trigger increases in car insurance premiums.
Refused Car Insurance
If you are denied insurance through conventional policies for permitted reasons, you can obtain car insurance by using the Facility Association. This is an organization to which all insurers belong. The Facility Association facilities high-risk and other residual insurance market drivers. Also, some insurance companies specialize in high-risk or low-demand special coverage. If you are legally entitled to drive and own a car, insurance will be available to you from some source, though the premiums may be much higher than regular insurance.