Yes, your auto insurance company can drop you. Here’s how to protect yourself against worst-case scenarios

Rema Samuels didn’t understand the letter she received from her car insurance company abruptly ending their years-long relationship.

“I’ve been driving for more than 50 years,” Samuels said “and haven’t had problems with my insurance ever until now.”

The letter wasn’t unprompted. The Brampton retiree was involved in two accidents in less than five years, which is why it was cancelled. The insurance company’s policy clearly states that a driver with two at-fault incidents in five years will not have their policy renewed. But Samuels says only one accident was her fault.

The first occurred in 2019, when a driver in another vehicle side-swiped her, fleeing the scene. In the motor vehicle collision report it details that Samuels was making a left turn when a vehicle coming in the opposite direction ran a red light and side-swiped her.

Her lawyer, Allan Strader, wrote to her insurance company, Deeks Insurance Services Inc., noting that because the damage was on the side of Samuels’ car and the other driver left the scene, it’s “clear evidence that he/she (the other driver) was to blame for the accident.”

The insurance company covered the damage caused to the car as well Samuels’ temporary rental.

The second accident occurred in a parking lot in 2022, when Samuels “lightly bumped” another car, she said. Because there was no damage she didn’t file a claim. However, the party whose car she bumped did. Samuels was found to be at fault in the accident.

“It was after this incident that, in August 2022, I got a letter from them (Deeks Insurance) saying the insurer would not renew my insurance and that I should find another insurer as soon as possible. No warning. Nothing,” she said.

Deeks Insurance did not respond to the Star’s request for comment by the time of publication.

All car insurance companies have specific guidelines they must adhere to when determining to terminate a client’s coverage, said Jennifer Krasic, LowestRates.ca’s insurance expert.

For many companies it’s typically two at-fault accidents in a five-year period, and it can be a combination of incidents, such as accidents and speeding tickets or nonpayments of the monthly insurance premium.

“If their client does not meet their guidelines they would not renew the insurance policy,” Krasic said. “It would actually be illegal for a company to continue an insurance policy that doesn’t meet those guidelines.”

In Ontario, there are two types of insurance markets: standard insurance markets and non-standard insurance markets, said Daniel Ivans, RATESDOTCA insurance expert.

Non-standard insurance markets are called high-risk markets, generally for drivers with “bad luck” over the years, he said. That can be serious charges such as impaired driving, multiple at-fault accidents, or multiple tickets for speeding or other traffic violations. Premiums in this market are typically higher than in the standard market.

“This is a rehabilitation-type market, where the company can accept you with this history and you work toward rehabilitating your record to then eventually sign on with a standard insurance company,” Ivans said. It typically takes up to six years of no at-fault accidents to improve your record, he added.

When looking for car insurance coverage it’s ideal to have what’s called “accident forgiveness,” which would forgive and forget the first at-fault accident by not increasing your premium.

“They can’t charge you for the accident but if you have a second one, they could still cancel your contract,” he said.

That’s why it’s also important to look for an accident waiver. That means if you get into a second accident the company can still keep you as a client (if you’re covered for the first accident with the accident forgiveness policy).

“If you can find a company offering both, you can protect yourself from a second accident, but that’s only offered by a limited number of companies,” Ivans added.

If you find yourself in a minor accident drivers must call their insurer, experts say.

On June 1, 2016, the Ontario government changed guidelines on minor at-fault accidents. If the damage is $2,000 or less it won’t be a rateable loss on your record, said Krasic.

“You can only have one minor accident every three years, and it won’t impact your record,” she said. “It’s also just key to make sure the insurer knows your side of the story, because if the other party files a claim saying all these things about you, and you don’t have your side of the story on the record, it will determine what happens to you.”

As a general rule, drivers should speak to insurance brokers or agents to understand different company policies and nuances, said Ivans.

“People need to be speaking with brokers and agents more regularly to make sure they’re properly protected because its amazing to see the gaps in knowledge we have about our coverage. It’s best to know it well,” he said.

For Samuels, she eventually found a new car insurance company to take her on, but it took multiple tries.

“They denied me from getting insurance because I’m in the system, my record is tainted,” she said.

Now, Samuels pays almost $700 a month for her car insurance, which is substantially higher than the $140 she paid with Deeks Insurance.

“I know that second accident wasn’t good though it was minor. But that first one was not my fault,” Samuels said. “It’s been very hard for me.”

Clarrie Feinstein is a Toronto-based business reporter for the Star. Reach Clarrie via email: clarriefeinstein@torstar.ca