How does accident forgiveness work in Ontario?

This article has been updated from a previous version.

In the unending quest to maintain an affordable car insurance policy, drivers who have been accident-free for the last six years — meaning no at-fault or partially at-fault accidents on their driving records — may qualify for an accident forgiveness rider to add to their policies. If you’re currently shopping for a better car insurance rate and fit the criteria, be sure to inquire about the endorsement.

In Ontario, insurance providers can’t increase a person’s premium after a minor at-fault collisions that result in less than $2,000 in damage and no injuries if there was no claim payout (for accidents that occurred in June 2016 or later). This provision is limited to one minor accident every three years, according to the Financial Services Regulatory Authority (FSRA), Ontario’s car insurance regulator.

How an accident forgiveness rider protects you

Accident forgiveness provides policyholders with an extra layer of protection. If you are found to be at fault for an accident, and it’s your first, adding this endorsement means your current insurance provider will “forgive” you for the collision by not increasing your premium.

However, you can only use it for one incident, and though your premium won’t go up, the collision remains on your driving record for six years. This means that if you switch providers, your premium with the new company will reflect the at-fault claim. In other words, accident forgiveness is not transferrable. Also, not all insurance providers offer their policyholders the option to buy an accident forgiveness rider for their policies in the first place.

Conditions of the accident forgiveness endorsement

An accident forgiveness rider must be added to your policy before an at-fault accident occurs and it will only protect the primary driver of the vehicle listed on the insurance policy, who has a clean driving record. The coverage can be applied to cars, trucks, motorcycles, and motorhomes.

Accident forgiveness needs to be purchased annually when renewing a policy or when switching to a different insurance provider.

However, an accident forgiveness endorsement will not apply if you’re convicted of a Criminal Code offence related to an accident, such as impaired driving, or if there’s a major conviction on your record like driving without insurance.

What an accident forgiveness rider does not cover

In Ontario, accident forgiveness won’t shield you from:

• Serious traffic convictions
• Any secondary or additional collision you are in after the first one
• Demerit points being added to your driver’s licence as a result of a conviction (though demerit points won’t affect your insurance rate, anyway)
• An accident while driving a business or commercial vehicle

Different insurance providers may have different rules governing accident forgiveness. In general, before they add the clause to your policy, most companies will insist your driving record is free of collisions for a period of six years.

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