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What Are the Risks of Driving Without Car Insurance?

Feb. 3, 2021
3 mins
A driver and passenger look out at the snowy road

Most people know driving a vehicle anywhere in Canada without car insurance is illegal. Nevertheless, some folks get behind the wheel without coverage, and every time they do, they put themselves and others at risk.

Paying for an auto policy is no one’s idea of fun. But having coverage is the responsible thing to do to protect yourself, your passengers, and other drivers on the road. And let’s face it, life is unpredictable. Anyone driving a vehicle could get into an accident unexpectedly. Should that happen to you, and you are driving without insurance, the financial and personal consequences you may face can be life-altering.

Depending on where in Canada you live, car insurance can get pricey, but there are sensible steps you can take to mitigate the cost. Besides, driving without coverage altogether is a reckless decision that could cost you thousands of dollars beyond what a standard policy costs as one young man in Burlington, Ontario, found out after getting caught. (Spoiler alert: his excuse for not having insurance didn’t work.)

Penalties and fines for driving without insurance

Think of it this way, according to RATESDOTCA’s data, the average auto premium in Ontario in December 2020 was $1,616. It could cost more per year depending on a variety of factors including where you live, but if you’re nabbed for driving without insurance in Ontario and are charged and convicted of the offence, it will cost you between $5,000 and $25,000.

Moreover, a 25% surcharge will be added to the fine, your driver’s licence could be suspended for up to one year, and the vehicle you’re driving may be impounded for up to three months (you get to pay the towing and impoundment fees too). And that’s for a first offence. Subsequent driving without insurance convictions in Ontario include fines between $10,000 to $50,000.

Other provinces also impose stiff penalties. In Alberta, for example, first offenders face fines of $2,875 to $10,000. If you don't pay the fine, you can get a jail sentence of 45 days to six months. A second offence in Alberta includes a fine of $5,000 to $20,000 with a jail sentence of 60 days to six months for failure to pay.

More consequences: higher premiums likely follow

After paying the price for driving without insurance, most people are likely to get a policy and avoid making the same mistake twice, which is a smart move. However, because you were convicted of driving without insurance once (and that conviction stays on your driving record for three years), many insurers will regard you as a high-risk driver.

Although an insurer can refuse to offer you auto insurance if you're deemed high risk, the insurance industry can't refuse to provide you with basic auto insurance policy. But you may be subject to higher insurance rates.

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What happens if you get into a collision and don’t have insurance?

Think things can’t get any worse for driving without insurance? Think again. Getting into a collision without coverage whether you’re at fault for the accident or not will cost you a motherlode.

For starters, not having collision coverage, which is optional, means you’re solely responsible for paying for damages to your vehicle. Furthermore, suppose you’re injured in the accident. In that case, you won’t have the benefit of filing a claim for accident benefits, which is the part of a standard policy that pays for medical and rehabilitation expenses. And if your injuries are severe enough that you can’t go to work, you can’t claim income replacement benefits either. Lastly, if you’re not-at-fault for the collision and are injured, you can’t sue the driver who is deemed to be at fault. That doesn’t leave you with many options.

Now, if you’re found to be at-fault for the collision, and someone else gets hurt, you may face financial ruin without a policy. That’s because the other driver or individuals (such as a pedestrian or cyclist) who are injured can sue you for damages. Those costs, by the way, can run into the millions. If you don’t have an insurance policy, you and you alone will be saddled with paying that debt as well as the plaintiff’s legal fees. If you can’t pay, you’ll likely be facing bankruptcy.

It’s safe to say driving without insurance is not worth it.

Getting the protection you need at an affordable price

Having adequate coverage doesn't mean you have to settle for an expensive policy that strains your budget. Take a few minutes to explore your options by comparing policies and premiums to find the car insurance coverage you need at a price you can afford.

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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