Auto Insurance

Cycling tickets, credit scores and other things insurers can’t use to determine your auto rate

By: Dominic Licorish on June 14, 2017
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“I’ll only be five minutes. Nothing’s going to happen.”

You leave your car on the street for a job interview or to pop into a coffee shop. Next thing you know, there’s a gift waiting for you under your windshield wiper: a parking ticket.

“Is this going to jack up my insurance rate?”

You aren’t the first person to think a parking ticket can affect your auto insurance rate. It’s one of several myths about auto insurance that just won’t die. Don’t worry though, we’re here to clear things up.

I talked to representatives from Aviva Canada and State Farm Canada to get the inside scoop on the personal information insurance companies are not allowed to use to determine rates in Ontario. Read on to find out what doesn’t matter when it comes to determining your auto insurance rate. And check out this post from last month to find out what does.

Not all tickets will affect your insurance

Getting a traffic ticket is never fun. It’s embarrassing, costly and can be time-consuming (if you fight it). Worst yet, your auto insurance could go up as a result for the next few years. Luckily there are some tickets you don’t need to worry about — at least from an insurance perspective.

Any tickets you receive while cycling — even running a red light — will not affect your rate. Parking tickets also won’t dent it. In fact, no bylaw violation will affect your rate, only violations of the Ontario Highway Traffic Act will. If you get a ticket that you think you have to fight to avoid it showing up on your record and jacking up your rate, make sure to check online first to see if it’s worth worrying about or call a traffic ticket expert to ask for details about the kind of charge it is.

Some accident claims are exempt

“Filing a claim will make your insurance go up.”

Another myth I’m sure you’re familiar with. The truth is that not all claims will make your insurance rate higher. In fact, the Insurance Act of Ontario states “No element of a risk classification system shall use past claims arising out of accidents occurring on or after September 1, 2010 for which an insured person was 25 per cent or less at fault.”

Insurers also cannot penalize you for the following accident types:

  • Minor at-fault accidents that happen on or after June 1, 2016 that meet certain criteria (there were no injuries, damages were less than $2,000 and paid by the at-fault driver, or there was no payment made by any insurer). This is only limited to one minor accident every three years.

  • Not-at-fault accidents.

That means that you won’t be stuck having to pay higher rates for things that are out of your control like damage from vandals or break-ins. While it may not affect your individual rate, the number and types of claims do have a general effect on the company’s rates.

Keep in mind that some companies have an at-fault collision forgiveness product that can help keep your rate from rising after one mistake. And when it comes to determining fault, it’s not the police who do it, says Chris Fowler, Senior Manager of Personal Lines at Aviva Canada.

“Police don’t determine fault when it comes to an auto accident," he says. It's insurers who do.

Your credit score and other financial info can’t be used against you

“Auto insurance companies that operate in Ontario are bound by regulations and laws that prohibit them from asking for or using certain personal information from potential customers. Examples include level of income, work history, occupation, net worth and credit rating,” says John Bordignon from State Farm Canada.

And it’s not just that companies don’t want to do it. The Insurance Act prohibits companies from using that information to determine rates. Likely to protect unemployed, low-income, or other at-risk people from being discriminated against by insurance companies.

So don’t worry if you’ve just lost your third job in as many months or filed for bankruptcy last year. As you can see from our auto quoter, this isn’t something that insurers can ever ask you about.

The colour of your car doesn’t matter

There’s not much to say here that hasn’t already been said before. Insurers don’t ask what the colour of your car is when you apply for a policy and they don’t care to keep track of any changes to your car’s colour at all. The myth that certain colours will result in a higher rate is just that: a belief with no basis in fact.

And all the other things they can’t use against you

Insurers also can’t use the following information to determine your auto rate: whether you own a credit card, the length of time you’ve lived at your current address, whether your vehicle is leased or owned and any time period during which you did not have car insurance coverage.