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Does a State of Emergency Declaration Impact Insurance?

April 17, 2020
4 mins
A man working from home sits on his laptop at his kitchen island

The federal and some provincial governments have made state of emergency declarations to deal with the COVID-19 pandemic and contain its spread. It is rare in Canada to see our governments take such actions, and it may leave you wondering what an emergency declaration is, and whether or not it impacts your home or auto insurance.

A state of emergency permits governments to invoke certain powers. For instance, a federal declaration of a public welfare emergency allows the government to take any number of actions it deems necessary to protect the public, including prohibiting travel to and from any specified area, evacuations, and regulating the distribution of essential goods and resources.

A provincial declaration of emergency, such as the one the Ontario government extended to May 12, allows the government to enforce orders like closing all non-essential workplaces and restricting social gatherings. In Alberta, where a 90-day public health emergency was declared on March 17, the government has prohibited social gatherings, requires people returning from outside of Canada to self-isolate for two weeks, and closed schools and childcare centres.

Does a State of Emergency Provoke a Change to Home Insurance?

In general, emergency declarations do not have a direct impact on home insurance policies unless a policy is due for renewal.

In that scenario, it depends on the insurer. For instance, insurers may implement an endorsement due to the COVID-19 pandemic and lockdown to grant an extension on the expiry date of a home insurance policy. The length of that period varies by insurer, but typically it is up to 120 days.

Though a pandemic is not considered a peril covered in a home insurance policy, there are ways in which COVID-19 can affect your insurance and finances.

Does a State of Emergency Declaration Affect Auto Insurance?

A federal or provincial state of emergency declaration does not have any impact on car insurance per se. However, the COVID-19 crisis has led to several auto insurers instituting a broad range of financial relief measures for their customers who may be having difficulty paying their monthly premiums.

On April 16, the Ontario provincial government eased its regulatory rules to enable all auto insurance companies to provide temporary insurance premium rebates to drivers. In making an amendment to the Insurance Act that removed restrictions on rebates, the government and the Financial Services Regulatory Authority (FSRA) of Ontario cleared a path for insurers to give all policyholders rebates regardless of their annual policy renewal date.

There are also other ways you may be able to reduce your car insurance premium during the coronavirus pandemic.


The RATESDOTCA editorial team are experienced writers focused on sharing stories and bringing you the latest news in insurance and personal finance. Our goal is to provide Canadians with the information and resources they need to make better insurance and financial decisions.

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