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How Does Accident Forgiveness Work in Ontario?

June 4, 2021
4 mins
A man looks concerned as he reviews his bills and statements

In the unending quest to find and keep 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 endorsement or rider to add to their policies.

In Ontario, the Insurance Act prevents insurers from increasing premiums for minor at-fault collisions with less than $2,000 in damage and no injuries if there is no payout by the insurer (for accidents that occurred in July 2016 or later). This provision is limited to one minor accident every three years, according to the Financial Services Regulatory Authority, Ontario’s car insurance regulator.

After an accident, insurers in Ontario’s no-fault insurance system use the province’s fault determination rules to determine who is responsible for a collision. These detailed guidelines outline who should receive blame in a wide variety of scenarios. Other provinces have their own fault determination rules that insurers follow.

An allocation of more than 25% of fault for a driver can lead to an increased premium at renewal for damages over $2,000.

In essence, 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 insurer will forgive you for the collision and not increase 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. Also, not all insurers offer their policyholders the option to buy an accident forgiveness rider for their policies.

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How an accident forgiveness rider protects you

An accident forgiveness rider must be added to your policy before an at-fault accident occurs and it will only protect the principal driver of the vehicle listed on the insurance policy who has a clean driving record. The coverage applies on a per vehicle basis, which includes cars, trucks, motorcycles and motorhomes. Moreover, it needs to be added annually when renewing a policy or when switching to a different insurer.

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. Also be aware the rider only applies to the insurance company that you were with at the time of the collision. If you switch companies, forgiveness may not apply, and your premium will reflect the accident.

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
  • An accident while driving a business or commercial vehicle

Different insurers may have different rules governing if they will add an accident forgiveness clause to your car insurance policy. In general, most insurers will insist your driving record is free of collisions for a period of six years or they will not add this rider to your policy.

Liam Lahey

Liam Lahey is a versatile, seasoned writer and editor. He worked as both a staff writer and freelance writer for many business and technology publications as well as for several newspapers. He writes about home, auto, and travel insurance, and is a media spokesperson for RATESDOTCA.

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