Simply, your job status has no bearing on your ability to obtain insurance. While lack of steady income may make paying premiums harder, as long as you are maintaining monthly or annual payments, an insurance company honours your policy. If an insurer refuses to sell you a policy, the company must provide written notice of the rules on which it based its decision.
Auto Insurance Underwriting Rules in Ontario
Every auto insurance provider operating in Ontario proposes their own rules for issuing and charging for their car insurance products. These rules are submitted to a government agency, the Financial Services Commission of Ontario. The FSCO reviews these and either approves or rejects the rules. Once approved, the insurance company is bound by its own terms. It cannot change these procedures along the way without first obtaining FSCO approval.
There are certain factors that an insurance company can’t consider when deciding to issue policies. Rules that don’t comply with provincial regulations and the Ontario Insurance Act don’t gain FSCO approval and are therefore can’t be used to deny coverage. For example, you can’t be refused car insurance for reasons such as:
- Credit history – This changes only if you’ve had auto insurance policies cancelled repeatedly due to non-payment. Other debts or an overall bad credit rating can’t prevent you from receiving insurance.
- Physical or Mental Impairment – As long as you qualify for an Ontario driver’s license you can’t be refused coverage.
- New License or New to Ontario – Your driving history in Ontario can’t be the basis for insurance refusal. Insurance companies can, however, charge you more for a policy when you have no previous insurance history.
What Information Does an Insurance Company Need?
While your employment status isn’t required information, other details your insurer needs include:
- Your Car – Year, make and model; how you drive the car, i.e. to work daily or occasional pleasure use; how much do you expect to drive in kilometers; will the car be used for business purposes?
- Current car insurance information, if you have any.
- Your personal information, such as: your age and gender; marital status; driver’s license number; details of accidents and traffic violations.
- Information on other drivers who will be listed on the policy as occasional drivers.
How Is Car Insurance Obtained in Ontario?
Car insurance is mandatory in Ontario for all vehicles on the road. If you own, lease or simply drive a vehicle without insurance you risk having your driver’s license suspended or car impounded. In addition, fines from $5,000 to $50,000 may be levied. A conviction for driving without a license may brand you as a high risk driver, making it difficult and expensive to obtain an auto insurance policy thereafter.
Car insurance comes through three sources in Ontario. Agents represent one insurance company and its products. Brokers carry the products of a number of insurance companies and they can offer you a range of prices and services for products offered by these insurers. Direct writing is gaining popularity as more insurance companies sell policies directly to consumers. Internet shopping makes this alternative more practical.
You can approach an insurer through any of these methods. Most advisors recommend comparison shopping to obtain the lowest rates and most appropriate coverage. There can often be large differences policy pricing between insurers.
For the widest comparison base, consider using RateLab’s car insurance calculator, available on this web page.
Can I Reduce the Amount I Pay for My Current Policy?
When a job loss impacts your budget, you may be able to reduce the amount you pay for a current car insurance policy.
First, if you were driving to and from your job, inform your insurer that you are no longer driving this distance daily. Reduced driving may save on your premiums. Remember to inform the insurer when you return to work or the situation changes again. Failure to report changes in the way your car is used could result in voided coverage.
Next, check for optional coverage on your policy that may be unnecessary. For example, if you had an endorsement providing coverage for non-owned vehicles, commonly called a car rental rider, but you no longer rent vehicles on business trips, you can drop the coverage for the unused option.
Finally, check with your company, agent or broker about discounts for which you might qualify. Most insurers have a number of discount programs, but these will not automatically come into effect. You must request these be applied to your policy.
Use RateLab’s free online calculator to find the lowest rates. Simply enter your postal code in the space provided to start.