A closeup of the damage caused on a silver car's bumper from an accident.Even good drivers sometimes have a bad day.

Everyone knows your driving record and insurance history factor heavily into the Ontario auto insurance premium you pay. But what happens to your premiums if you have to submit an insurance claim through your collision coverage because you were involved in an accident, or if your car is stolen from your driveway one evening and need to submit a claim through your comprehensive coverage?

Everybody usually assumes they'll see a spike in their rates, and while this is true in certain circumstances, it isn't always the case. In fact, there are a variety of times when your premiums will generally go unscathed if you need to submit an insurance claim.

Buyer beware! Both collision coverage and comprehensive coverage are optional. If you've opted not to include either of them on your policy, damages which otherwise might be covered, won't be. Collision coverage will help pay for repairs if your car is damaged in an accident, while comprehensive provides coverage for non-accident related claims like fire and theft: both have a deductible.

Accidentally Speaking...

An InsuranceHotline.com study recently found that 8.9 percent of Ontario drivers admit to having a collision on their record in the last 10 years. On the flipside, that means there are a whole lot of people who: 1) have an accident-free driving history; 2) have an accident in their history that insurers no longer care about; or, 3) fudged the truth while getting online quotes--but why would they do that? They'd only be lying to themselves!

No matter how you look at it, the reality is, that accidents happen. And, if you do not have first-hand (or recent) knowledge of what happens to your premiums when you need to submit an insurance claim, you might fear the worst.

What follows, then, is a primer on how insurance claims may, or may not, affect your premiums.

First up, is fault determination. If you're in a collision you'll either be found fully (100 percent) at fault for causing it, partially at fault, or fully not at fault. In Ontario, the degree of fault is determined by the Fault Determination Rules which all insurers must follow These are rules that are in place to ensure all drivers are treated consistently.

An insurance claim for a not at fault collision

Let's start with the best possible scenario (if such a thing exists when you're in an accident). If you're involved in a collision and you're wholly not responsible for causing it (e.g. another vehicle rear ends you), the resulting insurance claim for the damages caused will not increase your premium. You were simply at the wrong place at the wrong time and your premiums won't take a hit when it's time to renew or shop around.

An insurance claim for a partially or wholly at fault collision

When you're found to be at fault for a collision, even partially, your premiums will likely increase. Depending on your insurer your premiums could increase a few hundred dollars or more. When this happens, it's time to put your rates to the test by shopping around, as some insurers are more forgiving than others.

Speaking of forgiveness, there are two notable exceptions when an at fault collision won't increase your premiums:

  • If your found to be less than 25 percent responsible for the collision. When your role in the collision is minimal, insurance companies in Ontario are not allowed to use it against you in determining your rate.
  • If your policy includes an Accident Forgiveness endorsement. With Accident Forgiveness your premiums will not increase after your first at fault collision. Not everyone has this endorsement, however, as it can cost up to $100 to have. It's also usually only available to drivers who have already been collision-free for six years.

About Accident Forgiveness: The Accident Forgiveness endorsement is company-specific, meaning that although your current insurer may "forgive" your first at fault collision in terms of premiums charged, the incident is not forgotten. It will be listed on your driving record and insurance history. The collision will follow you, for six years, if you decide to switch insurers or if you're in a second accident.

Insurance Claims for Fire, Theft, Vandalism, or Windshield Replacement

Insurance claims for non-accident related damages, like fire, theft, or vandalism are filed through your comprehensive coverage. These types of insurance claims have nothing to do with your driving abilities and are usually just an unlucky break. As a result, they typically will have no impact on your future premiums.

The only caveat here, is if you have windshield replacement coverage. Your first claim for a cracked windshield will usually leave your premiums intact, however, if you have repeated claims, your insurer may increase your deductible or exclude this coverage altogether. Word to the wise, if you need to submit a windshield replacement claim, you'll want to avoid dirt or gravel roads for a bit.

Insurance Claims Don't Always Increase Your Rates

Having to submit an insurance claim isn't the end of the world. After all, that's why you have insurance coverage, to help offset the financial costs when things wrong. If you're unhappy with how your insurer's rates change after an insurance claim, remember that you have options. You can take your business elsewhere by shopping around. Compare quotes in minutes for your lowest rates at Kanetix.ca. It's really that easy.

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