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HomeCar Insurance ResourcesGetting Car Insurance After Cancelled Policy in Canada

Yes, in Canada, if your car insurance has been cancelled, you can still obtain a new policy, but there are some challenges and considerations:

  1. Reason for Cancellation: Your ability to secure a new policy largely depends on the reason your previous insurance was cancelled. Common reasons for cancellations in Canada include non-payment of premiums, fraud or misrepresentation on the application, or accumulating too many at-fault claims or traffic convictions.
  2. High-Risk Insurance Companies: If you’re unable to secure a policy with standard insurance carriers due to a cancellation, you might need to approach high-risk auto insurers. These companies specialize in insuring drivers who are considered a higher risk. Premiums with high-risk insurers are generally more expensive than those of standard insurers.
  3. Provincial Differences: Each province and territory in Canada has its own insurance regulations. In some provinces, such as British Columbia, Saskatchewan, and Manitoba, car insurance is provided by a government-run insurer. In others, it’s provided by private companies. The way cancellations are handled and the availability of high-risk insurers can differ from one province to another.
  4. Reapplication: When you apply for a new policy after a cancellation, it’s crucial to be honest about your history. Misrepresenting or omitting information can result in another cancellation.
  5. Premium Increase: As mentioned earlier, if you’ve had a policy cancelled, especially for reasons like non-payment or misrepresentation, you can expect to pay a higher premium for a new policy.
  6. Facility Association: If you’re unable to find coverage in the voluntary market in Canada, the Facility Association is an entity that ensures all drivers can obtain auto insurance. However, rates through the Facility Association are typically much higher than standard or even high-risk insurers.
  7. Improving Your Record: Over time, as you demonstrate responsible driving and timely payment of premiums, you can move back to standard insurance companies and potentially benefit from lower rates. It’s crucial to maintain a clean driving record and avoid any further issues with insurers.

If you find yourself in a situation where your insurance has been cancelled, it’s a good idea to consult with an insurance broker. They can guide you through the process, provide advice, and potentially connect you with insurers that are more likely to offer you a policy.

Brief province-by-province breakdown

Here’s a brief province-by-province breakdown of obtaining car insurance after cancellation in Canada:

  1. British Columbia: Insurance is provided primarily by the government-run Insurance Corporation of British Columbia (ICBC). If you’ve been cancelled due to non-payment, you’ll likely face higher premiums upon reapplying. High-risk drivers may be directed to ICBC’s “Driver Risk Premium” or “Driver Penalty Point” programs.
  2. Alberta: Private insurers operate in Alberta. If you’re deemed high-risk because of cancellations or other reasons, you may be insured through the Facility Association. Brokers can help connect high-risk drivers with appropriate insurers.
  3. Saskatchewan: The primary insurer is the government-run Saskatchewan Government Insurance (SGI). High-risk drivers can face higher premiums or may be required to participate in special programs or pay additional fees.
  4. Manitoba: Manitoba Public Insurance (MPI) is the primary provider. Like other provinces with public insurance, high-risk drivers face higher premiums and may have restrictions or special conditions on their policies.
  5. Ontario: Private insurers serve Ontario. High-risk drivers may be directed to companies specializing in higher-risk profiles, or in the most challenging cases, to the Facility Association.
  6. Quebec: Insurance is split between the government-run Société de l’assurance automobile du Québec (SAAQ) for bodily injury and private insurers for property damage. Cancellations with one provider might not necessarily impact the other, but high-risk drivers can expect higher premiums in the private sector.
  7. New Brunswick: Served by private insurers. Like in Ontario, high-risk drivers might be referred to specialized insurers or the Facility Association.
  8. Nova Scotia: Private insurers operate in Nova Scotia. High-risk drivers may be directed to the Facility Association or to companies that specialize in high-risk coverage.
  9. Prince Edward Island: Like most other provinces with private insurance, PEI drivers who have had a policy cancelled might be directed to high-risk specialists or the Facility Association.
  10. Newfoundland and Labrador: Private insurers provide coverage. Drivers facing cancellation may need to turn to the Facility Association or high-risk insurers.
  11. Yukon, Northwest Territories, and Nunavut: Private insurers operate in these territories. High-risk drivers or those with cancellations might have limited options and may face higher premiums.

How long does insurance cancellation stay on record Canada?


When an insurance policy is cancelled, it can affect your insurance history and potentially your premiums for several years. The exact duration varies by province and by the specific reason for the cancellation. Here’s a general overview, province by province:

  1. British Columbia (ICBC):
    • Insurance history typically looks back at the previous three years for at-fault claims.
    • Traffic convictions can stay on your driving record for up to five years.
  2. Alberta:
    • Typically, insurers look at the past three to six years for driving and insurance history.
    • Major convictions can influence rates for up to three years.
  3. Saskatchewan (SGI):
    • At-fault collisions stay on your record for two years from the date of the collision.
    • Traffic convictions can stay on your record for various durations depending on the severity.
  4. Manitoba (MPI):
    • At-fault claims generally stay on record for five years.
    • Convictions depend on the severity but usually affect your driver safety rating for three years.
  5. Ontario:
    • Insurance companies typically look back three to six years for claims and convictions.
    • Driving convictions usually stay on your record for three years, but serious convictions can stay for longer.
  6. Quebec (SAAQ):
    • At-fault accidents typically stay on record for the past six years.
    • Points for driving convictions vary in duration depending on the severity of the offense.
  7. New Brunswick:
    • Insurers typically consider the past five to ten years of driving history.
    • Traffic convictions usually stay on record for three years.
  8. Nova Scotia:
    • Generally, insurers look back six years for at-fault accidents.
    • Traffic convictions tend to stay on record for three years.
  9. Prince Edward Island:
    • Insurers usually consider the past six years of driving history.
    • Traffic convictions typically remain for three years.
  10. Newfoundland and Labrador:
  • Driving and claims history generally go back five to ten years.
  • Convictions usually affect your record for three years.
  1. Yukon, Northwest Territories, and Nunavut:
  • Typically, insurers consider the past three to six years of driving and insurance history.
  • Traffic convictions usually stay on record for around three years, but it can vary based on the severity.

Note: The exact duration and impact of cancellations, claims, and convictions depend on individual insurance companies’ underwriting rules and guidelines. This information provides general guidelines, but it’s essential to check with specific insurers or provincial governing bodies for precise details. Also, remember that while an incident may no longer impact your insurance premiums after a certain time, it might remain on official records for a more extended period.

Car insurance rates after cancellation in Canada

Rate Changes

After a car insurance cancellation, it may be more difficult to find coverage, and the rates offered by insurance providers may be higher than the rates for drivers who have maintained continuous insurance coverage. That said, here are some example car insurance rates after cancellation for sample drivers in major Canadian cities:

  1. Vancouver, British Columbia: For a 30-year-old male driver who has had their car insurance policy cancelled, the average annual cost for car insurance is around $3,500-$4,000.
  2. Calgary, Alberta: For a 40-year-old female driver who has had their car insurance policy cancelled, the average annual cost for car insurance is around $2,500-$3,000.
  3. Toronto, Ontario: For a 25-year-old male driver who has had their car insurance policy cancelled, the average annual cost for car insurance is around $4,500-$5,000.
  4. Montreal, Quebec: For a 35-year-old female driver who has had their car insurance policy cancelled, the average annual cost for car insurance is around $2,000-$2,500.
  5. Halifax, Nova Scotia: For a 45-year-old male driver who has had their car insurance policy cancelled, the average annual cost for car insurance is around $1,500-$2,000.
  6. Winnipeg, Manitoba: For a 30-year-old female driver who has had their car insurance policy cancelled, the average annual cost for car insurance is around $2,500-$3,000.
  7. Regina, Saskatchewan: For a 25-year-old male driver who has had their car insurance policy cancelled, the average annual cost for car insurance is around $2,500-$3,000.
  8. Edmonton, Alberta: For a 35-year-old female driver who has had their car insurance policy cancelled, the average annual cost for car insurance is around $3,000-$3,500.

These are just example rates and individual rates may vary based on a number of factors, including the driver’s age, driving record, and the type of vehicle being insured. Additionally, these rates are specific to cancelled policies and may not reflect the rates for drivers who have maintained continuous insurance coverage.

Reasons car insurance companies cancel auto insurance policies


In Canada, insurance companies must adhere to regulated practices. They can’t simply cancel a policy without a valid reason. Here are common reasons why auto insurance policies may be cancelled:

  1. Non-Payment of Premium: This is one of the most common reasons for cancellation. If a policyholder fails to pay the premiums on time and doesn’t address the missed payment within the grace period, the insurer can cancel the policy.
  2. Fraud or Misrepresentation: If a policyholder provides false information when obtaining the policy or when filing a claim, the insurance company can cancel the policy. This includes not disclosing previous accidents, traffic violations, or incorrectly stating how the vehicle is used (e.g., saying it’s for personal use when it’s used for business).
  3. Change in Risk: If there’s a significant change in the risk associated with insuring the driver or vehicle, the insurer might opt to cancel. For example, if the driver obtains multiple traffic convictions or at-fault accidents in a short period, it may elevate their risk profile beyond the insurer’s acceptable range.
  4. Policy Violations: Not adhering to the terms and conditions set out in the policy can lead to cancellation. This includes things like driving without a valid license, allowing unlisted drivers to use the vehicle frequently, or using the vehicle for purposes not covered under the policy, such as ridesharing without appropriate coverage.
  5. Insurable Interest: If a policyholder no longer has an insurable interest in the vehicle, the insurance company may cancel the policy. For instance, if the vehicle is sold and the policyholder doesn’t notify the insurer.
  6. Insurer’s Business Decision: While less common, an insurance company might decide to stop offering coverage in a particular region or for a certain type of vehicle. In such cases, they may cancel policies, but typically they’re required to provide advance notice to affected policyholders.
  7. Suspension of Driver’s License: If the insured’s driver’s license is suspended for reasons such as DUI/DWI convictions, accumulating too many demerit points, or other major violations, the insurer may decide to cancel the policy.

In most provinces, insurance companies are required to provide written notice of cancellation, specifying the reason. Policyholders also have rights and may have avenues to dispute or seek clarification on a cancellation, depending on the province and the situation.

The consequences of a cancelled auto insurance policy


Having an auto insurance policy cancelled in Canada can lead to several consequences for the policyholder:

  1. Higher Premiums: If you seek a new insurance policy after a cancellation, you’ll likely face higher premiums. Insurance companies see a history of cancellation, especially due to non-payment or fraud, as a sign of high risk.
  2. Difficulty Obtaining Coverage: Many standard insurance companies may be hesitant to provide coverage to someone with a policy cancellation on their record. This might lead the individual to seek coverage from high-risk insurers, which tend to charge higher premiums.
  3. Legal Ramifications: It’s illegal to drive without auto insurance in Canada. If your policy is cancelled and you continue to drive without obtaining new coverage, you can face severe penalties, including hefty fines, license suspension, or even imprisonment in some severe cases.
  4. Financial Liability: Without insurance, you’re personally responsible for any damages or injuries you cause in an accident. This can lead to substantial out-of-pocket expenses.
  5. Loss of Accident Benefits: In provinces with no-fault insurance, drivers rely on their own insurance policy for medical and rehabilitation benefits after an accident, regardless of who’s at fault. Without insurance, you won’t have access to these benefits.
  6. Vehicle Impoundment: If you’re caught driving without insurance, authorities might impound your vehicle. To retrieve it, you’ll need to show proof of insurance and pay associated fees.
  7. Lapse in Coverage: Even a short lapse in coverage can lead to higher insurance premiums when you seek a new policy. Insurance companies often provide better rates to individuals with continuous insurance histories.
  8. Mandatory High-Risk Insurance: Depending on the reason for cancellation, you may be required to carry high-risk insurance for a certain period, which is more expensive than standard insurance.
  9. Future Scrutiny: Future applications for auto insurance may be subject to more rigorous scrutiny. Insurers may require more details, and there’s a higher likelihood of the application being declined or being offered only at a higher rate.
  10. Credit Score Impact: If your policy was cancelled due to non-payment and the insurance company sends the unpaid amount to collections, it could negatively affect your credit score.

To avoid the adverse consequences of policy cancellation, it’s essential to maintain open communication with your insurer. If you’re facing financial difficulties, reach out to them to discuss possible payment plans or adjustments. Always ensure you provide accurate information on insurance applications and stay informed about the terms and conditions of your policy. If your policy is cancelled, seek new coverage immediately to avoid a lapse.

Summary and FAQs

  1. Can I get car insurance after my policy has been cancelled?
    • Answer: Yes, you can get car insurance after a cancellation. However, it might be more challenging and potentially more expensive. You might need to approach high-risk auto insurers or the Facility Association, depending on your province and the reason for cancellation.
  2. Why would an auto insurance policy be cancelled?
    • Answer: Common reasons include non-payment of premiums, fraud or misrepresentation on the application, a significant change in risk, violations of the policy’s terms and conditions, or a business decision by the insurer.
  3. How long does a cancellation stay on my record in Canada?
    • Answer: The exact duration varies by province and the specific reason for the cancellation. Typically, insurance companies look back three to six years for driving and insurance history, but some infractions might remain on record longer.
  4. Is it illegal to drive without insurance in Canada?
    • Answer: Yes, it’s illegal to drive without valid auto insurance in all provinces and territories in Canada. Penalties can include fines, license suspension, vehicle impoundment, and in severe cases, imprisonment.
  5. Will my premiums go up if I find new insurance after a cancellation?
    • Answer: Yes, it’s likely that your premiums will be higher after a policy cancellation, especially if the reason for cancellation was due to non-payment, fraud, or a significant increase in risk.
  6. What’s the difference between insurance cancellation and non-renewal?
    • Answer: Cancellation occurs when an insurance policy is terminated before its expiry date. Non-renewal means the insurer chooses not to renew the policy once it expires. The implications and regulations for each can differ.
  7. What is the Facility Association?
    • Answer: The Facility Association is an entity that ensures all drivers can obtain auto insurance, especially those unable to find coverage in the regular market. It operates in several provinces and is considered a “last resort” for high-risk drivers. Rates through the Facility Association are typically higher than standard insurers.
  8. How can I reduce my premiums after a policy cancellation?
    • Answer: Maintaining a clean driving record, completing a defensive driving course, increasing deductibles, bundling insurance products, and regularly shopping around for rates can help reduce premiums. Over time, as the cancellation becomes more distant and your record improves, you may also qualify for better rates.
  9. Can I dispute a policy cancellation?
    • Answer: Yes, if you believe your policy was unjustly cancelled, you can raise a dispute. The procedure may vary depending on the province and the insurer’s internal processes. Consulting with an insurance broker or ombudsman can provide guidance.
  10. Do I get a refund if my policy is cancelled?
  • Answer: If you’ve prepaid your premiums and the policy is cancelled, you might be entitled to a refund for the unused portion of the premium. However, if the policy was cancelled due to non-payment, any refund might be applied to the outstanding balance.
  1. Is there a grace period after my policy is cancelled due to non-payment?
  • Answer: Yes, insurers typically provide a grace period (often 10 to 30 days) after a missed payment. If you settle the outstanding amount within this period, the policy usually remains in effect without a lapse in coverage. However, consistently missing payments can lead to cancellation without a grace period.
  1. Can an insurer cancel my policy mid-term without a valid reason?
  • Answer: No, insurers in Canada cannot cancel a policy mid-term without a valid reason, such as non-payment or fraud. If they wish to discontinue your coverage for business reasons, they usually must wait until the policy is up for renewal.
  1. How can I rebuild my insurance history after a cancellation?
  • Answer: Start by obtaining a new policy as soon as possible, even if it’s with a high-risk provider. Pay premiums on time, drive safely to avoid claims and traffic violations, and consider completing driver education programs. Over time, your risk profile will improve, allowing you to transition back to standard insurance providers.
  1. Do all insurers in Canada view policy cancellations in the same manner?
  • Answer: While all insurers will view a policy cancellation as a negative factor, the extent of its impact can vary between companies. Different insurers have different underwriting criteria and risk appetites, so it’s beneficial to shop around.
  1. What should I do immediately after my policy is cancelled?
  • Answer: First, refrain from driving until you secure new coverage. Approach your broker or agent to discuss options, consider getting quotes from high-risk insurers, and address any outstanding issues, such as unpaid premiums.
  1. Do I need to disclose a previous cancellation when shopping for a new policy?
  • Answer: Yes, when applying for a new insurance policy, you’re typically asked about any previous cancellations. It’s essential to be honest, as misrepresentation can lead to another cancellation or a denied claim in the future.
  1. Are there any provincial programs or resources for drivers with cancelled policies?
  • Answer: Most provinces don’t have specific programs for drivers with cancelled policies, but they do regulate the insurance industry and ensure consumers are treated fairly. Each province has an insurance regulatory body or ombudsman that can provide guidance or assistance.
  1. How does a cancellation in one province affect my ability to get insurance in another province?
  • Answer: If you move to another province, the new insurer will likely request an insurance history from your previous province. A cancellation in one province can impact your ability to get insurance in another, as it’s part of your overall insurance history.
  1. Are there any additional fees associated with policy cancellations?
  • Answer: Depending on the insurer and the reason for cancellation, there may be administrative fees or short-rate penalties applied when a policy is cancelled before its expiry date.
  1. Is it more challenging to get comprehensive coverage after a cancellation?
  • Answer: While obtaining basic liability coverage after a cancellation is essential and often achievable (though possibly at higher rates), insurers might be more hesitant to provide comprehensive or collision coverage without higher premiums or deductibles, given the perceived increased risk.

If you’ve experienced an insurance policy cancellation in Canada, it’s vital to be proactive in understanding your options and rights. Engaging with professionals in the industry, such as brokers or regulatory bodies, can help provide clarity and direction in navigating the situation.

About the Author: Valerie D. Hahn

Valerie is an insurance editor, journalist, and business professional at RateLab. She has more than 15 years of experience in personal financial products. She strives to educate readers and ensure that they are properly protected.

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