Yes, a car insurance company can refuse to insure you in Canada. Insurance companies have the right to determine the level of risk they are willing to take on when providing coverage to a driver. If an insurance company deems you to be a high-risk driver, they may choose not to provide coverage or offer you a policy with high premiums.
There are several reasons why an insurance company may refuse to insure you. Some of the common reasons include:
- Poor driving record: If you have a history of traffic violations, accidents, or claims, you may be considered a high-risk driver and may have difficulty finding coverage.
- Lack of driving experience: If you are a new driver with little or no driving experience, you may be considered a high-risk driver and may have difficulty finding coverage.
- Previous insurance claims: If you have a history of making insurance claims, you may be considered a high-risk driver and may have difficulty finding coverage.
- Vehicle type: If you own a high-performance or high-risk vehicle, you may have difficulty finding coverage or may be required to pay higher premiums.
- Criminal record: If you have a criminal record, you may have difficulty finding coverage, especially if your conviction is related to driving or traffic offenses.
Insurance companies are regulated by provincial authorities in Canada and are required to follow certain guidelines when it comes to underwriting and policy issuance. If you believe you have been unfairly denied coverage, you can contact your provincial insurance regulator for assistance.
What To Do If An Auto Insurance Company Denies Coverage
If an auto insurance company denies coverage, there are several steps you can take:
- Ask for an explanation: Contact the insurance company and ask for an explanation as to why coverage was denied. Make sure you understand the reason for the denial and ask for any supporting documentation or evidence that was used to make the decision.
- Review your policy: Review your policy to ensure that you have provided accurate and complete information. If there are errors or omissions, this may have contributed to the denial of coverage.
- Consider an appeal: If you believe the denial was unjustified, consider appealing the decision. Most insurance companies have an appeals process, which involves submitting additional information or documentation to support your case.
- Seek legal advice: If you have exhausted all other options and still believe the denial was unjustified, you may want to consider seeking legal advice. An attorney can review your case and advise you on your legal options.
- Look for alternative coverage: If you are unable to obtain coverage from the original insurance company, look for alternative coverage from other insurance providers. Keep in mind that you may be considered a high-risk driver, which could result in higher premiums or limited coverage options.
What Insurance Companies Look For When Qualifying You For Auto Insurance
Insurance companies look at a variety of factors when qualifying you for auto insurance, including:
- Driving record: Your driving record is one of the most important factors that insurance companies consider when determining your risk as a driver. They will look at your history of traffic violations, accidents, and claims.
- Age and gender: Younger drivers and male drivers tend to have higher accident rates, which means they may be charged higher premiums.
- Vehicle type: The make, model, and year of your vehicle can also impact your insurance rates. Vehicles that are more expensive to repair or have a higher likelihood of being stolen or involved in accidents may result in higher premiums.
- Credit score: In some provinces in Canada, insurance companies may also consider your credit score when determining your rates. A low credit score could be viewed as an indicator of financial instability, which could increase your risk as a driver.
- Location: Your location can also impact your insurance rates. If you live in an area with a high rate of car thefts or accidents, you may be charged higher premiums.
- Annual mileage: The amount of driving you do each year can also impact your rates. Drivers who commute long distances or spend a lot of time on the road are considered to be at higher risk of accidents, which can result in higher premiums.
- Occupation: Certain occupations may be viewed as riskier than others. For example, drivers who use their vehicles for work, such as delivery drivers or sales representatives, may be charged higher premiums.
If no insurance company will insure you, you must purchase
If no insurance company is willing to insure you, you may be required to purchase insurance from a high-risk insurance provider. In Canada, each province has a facility or pool for high-risk drivers who are unable to obtain insurance in the standard market.
In Ontario, for example, the facility is called the Facility Association, which is an organization that ensures high-risk drivers are able to purchase liability insurance. High-risk drivers who have been denied coverage by at least two standard insurance companies can apply to the Facility Association for coverage.
The premiums for high-risk insurance are typically higher than standard insurance due to the increased risk involved. However, it is important to have insurance coverage in order to protect yourself and others in the event of an accident.
Being labeled a high-risk driver does not mean you will be unable to obtain insurance. While you may be required to pay higher premiums or have limited coverage options, there are still insurance companies that specialize in providing coverage to high-risk drivers. It’s a good idea to shop around and get quotes from multiple insurance providers to find the best coverage and rates for your specific situation.