If you fail to pay your auto insurance premium on time in Ontario, your insurance company may cancel your policy. In Ontario, auto insurance companies are legally allowed to cancel your policy for non-payment, as it is a breach of the contract you signed when you purchased the policy. Here’s what you need to know about auto insurance cancellation for non-payment in Ontario:
- Notice of cancellation: Before your auto insurance policy can be cancelled for non-payment, your insurance company is required to send you a notice of cancellation. This notice will inform you that your policy will be cancelled if you do not pay your overdue premium within a specified period of time, usually 15 days.
- Options after cancellation: If your auto insurance policy is cancelled for non-payment, you may have several options. You may be able to pay the overdue premium and have your policy reinstated, or you may need to shop around for a new policy with another insurance company.
- Impact on your driving record: Having your auto insurance policy cancelled for non-payment can have a negative impact on your driving record. It may make it more difficult to find affordable auto insurance in the future, and you may also face penalties and fines for driving without insurance.
- Reinstatement fees: If you choose to have your auto insurance policy reinstated after it has been cancelled for non-payment, you may need to pay reinstatement fees in addition to your overdue premium.
- Prevention: To avoid having your auto insurance policy cancelled for non-payment, it’s important to stay on top of your payments and make sure you pay your premiums on time. Consider setting up automatic payments or reminders to help you stay organized and avoid missing payments.
What happens when a car insurance policy is Cancelled?
When a car insurance policy is cancelled, it means that the policy is no longer in effect, and the driver is no longer covered by the insurance company. The consequences of a cancelled car insurance policy can vary depending on the reason for the cancellation, the driver’s insurance history, and the specific circumstances surrounding the cancellation. Here are some possible consequences of a cancelled car insurance policy:
- Driving without insurance: If your car insurance policy is cancelled and you continue to drive your car, you will be driving without insurance. This is illegal in most jurisdictions, including Ontario, and can result in fines, penalties, and other legal consequences.
- Difficulty finding coverage: When you apply for new car insurance after a policy cancellation, you may have difficulty finding coverage, especially if the cancellation was due to non-payment or other negative factors on your driving record. Some insurance companies may refuse to provide coverage, while others may charge higher rates or offer limited coverage options.
- Impact on insurance rates: A cancelled car insurance policy can have a negative impact on your insurance rates, as it is considered a red flag by insurance companies. When you apply for new insurance, the company may view you as a higher-risk driver, which can result in higher rates and limited coverage options.
- Legal consequences: If you are involved in an accident while driving without insurance, you may be held personally liable for any damages or injuries that occur. This can result in legal action against you, including lawsuits and wage garnishment.
- Loss of coverage benefits: When your car insurance policy is cancelled, you lose the benefits of coverage, including protection against damage, theft, and liability. This can leave you vulnerable to financial losses and legal consequences if an accident or other incident occurs.
Can you get insurance if you have been cancelled?
Yes, it is possible to get insurance after your policy has been cancelled for non-payment in Ontario, but it may be more difficult and expensive. Insurance companies are legally allowed to consider a driver’s insurance history when determining rates and eligibility for coverage, and having a policy cancelled for non-payment can be viewed as a negative mark on your record.
If you have been cancelled for non-payment, it’s important to take steps to remedy the situation as soon as possible to prevent further negative consequences. This may include paying the overdue premium and any reinstatement fees, or shopping around for a new policy with a different insurance company.
When applying for new insurance after a cancellation, it’s important to be honest and transparent about your insurance history, as failing to disclose this information can result in your policy being cancelled again in the future. You may also want to consider working with an insurance broker, who can help you find coverage that meets your needs and budget.
It’s worth noting that while insurance companies can consider your insurance history when determining rates and eligibility, they are also required to provide coverage to drivers who meet the requirements set out by the province. This means that even if you have been cancelled for non-payment, you should still be able to find coverage, but it may be more expensive or limited in terms of coverage options.
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