Auto Insurance

If your designated driver crashes your car, you’re on the hook for repair costs

By: Jessica Mach on January 29, 2019

In December, IBI Group consultant Amy Emm went out with a client and had several margaritas.

As the evening came to a close, Emm had a decision to make: how was she going to get home? She knew that she’d need her car in the morning, to take her kids to a Christmas party. But she also didn’t want to drive under the influence. Emm eventually settled on what she thought was the most responsible option: she called a designated driving company, the Durham region-based Keys to Us, and paid them $60 to have an employee drive her and her car back to her family’s Scarborough home.

The driver ended up crashing her car.

The crash happened right outside Emm’s house, where the driver took the turn into her driveway three or four feet too soon — a mistake that Emm said no other driver had ever made in the four years that she’s lived there. Instead of backing out to try to minimize the damage, the driver instead floored it, pulling the car through the length of the ditch and causing damage “all the way from the front to the back on the undercarriage,” Emm told the Toronto Star on Monday.

A local auto body shop estimated repairs to cost $6,386.45, minus a $1,000 deductible. And according to insurance laws, Emm has to pay.

What if she had killed somebody? That would be on my record too. It’s such a big deal

In Ontario, drivers buy auto insurance for their vehicles, not for specific drivers. Regardless of who borrows and drives your car — whether it be a friend, a spouse, or a designated driver — it is ultimately the owner of that car’s insurance policy who faces the insurance consequences of an accident. If someone else crashes your car, in other words, it’s your insurance that will pay for repairs — and your driving record that will be impacted.

Emm thinks this system is flawed — and that she shouldn’t have to pay for her designated driver’s mistakes. “What if she had killed somebody?” she asked. “That would be on my record too. It’s such a big deal.”

Emm’s incident points to a gap in Ontario’s auto insurance market. In addition to car-centric policies, there aren’t any insurance options for companies like Keys to Us, which rely on the insurance policies of clients to cover damages.

“Unfortunately there is no company in Canada according to the Insurance Bureau of Canada that will allow us to cover the clients’ vehicle,” said Don Hinton, founder of Pickering-based designated driving service To Arrive Alive.

Myrna Lachance, co-owner of Keys to Us, suggested she would insure each of the company’s drivers if she could. “We’ve been trying for 20 years to get that kind of insurance. We’ve tried and tried and tried,” she said. “When (clients) give the keys to our drivers, the responsibility goes back to themselves and their insurance.”

Usually, the company deals with accidents by having the driver pay for repair deductibles. The money comes directly from the driver’s salary.

But the company refuses to pay the entirety of Emm’s $1,000 deductible, agreeing only to hand over $500.

“Any car that I know of, the deductible is $500,” Lachance said.

“My husband is a general contractor and if he goes into somebody’s house and accidentally burns it down, guess what? It’s his business insurance that covers it, not their home insurance,” Emm said. “So why should this be any different?”