Getting Car Insurance After Cancellation in Ontario

3 minutes can save you hundreds. Enter your postal code below and join thousands of Canadians saving on insurance.

Secure. No Spam. No Fees.

Why You Can Trust MyChoice

MyChoice serves as an independent intermediary between you, financial institutions and licensed professionals without any additional charge to our users. In the interest of transparency, we disclose that we partner with some of the providers we write about – we also list many financial services without any financial gain. MyChoice does not operate a financial institution or brokerage and to ensure accuracy, our content is reviewed by licensed professionals. Our unique position means that we hold no recurring stake in your policy, ensuring our mission to help Canadians make better financial decisions is free of bias or discrimination. 

Article Contents
Picture of By <span>Aren Mirzaian</span>
By Aren Mirzaian

Updated on January 16, 2024

Visit author page
Picture of By <span>Aren Mirzaian</span>
By Aren Mirzaian

Updated January 16, 2024

Visit author page

3 minute read

Article Contents
Getting Car Insurance After a Cancelled Policy in Ontario

Navigating the complexities of auto insurance in Ontario can be difficult, especially after experiencing a policy cancellation. Understanding the implications and steps to secure new coverage is crucial in Ontario. This guide delves into the nuances of getting car insurance after a cancellation, mainly focusing on scenarios in Ontario, the impact of cancelled insurance on your record, and the specific challenges related to non-payment cancellations.

Why Policies Get Cancelled

In 2018, Canada had approximately 26 to 27 million individuals registered as licensed drivers, meaning that millions of Canadians currently have an active auto insurance policy, as that is a legal requirement for driving in Canada. But what do you do if your policy gets cancelled? Insurance policies can be cancelled for various reasons. In Ontario, non-payment is a common cause, leading to immediate policy termination. For instance, in 2020, a Mississauga driver’s insurance premiums nearly tripled after she miscalculated her rebate and underpaid her premium. Thinking the rebate would cover the shortfall, she ignored a $77.02 payment notice, resulting in her policy being cancelled the next month. Other common reasons include:

  • Non-Payment of Premiums: Missing even one payment can lead to policy cancellation; unpaid bills must be cleared for new insurance.
  • Misrepresentation: Providing false information, e.g. about your driving history or vehicle usage, can result in cancellation.
  • Suspended License: Policy may be cancelled if your driver’s license is suspended or revoked.
  • Material Risk Change: Significant changes, such as new medical conditions affecting driving, can lead to cancellation.
  • Fraud: Filing fraudulent claims or lying about claim details or the circumstances of a loss can cause policy termination.
  • Excessive Claims: Filing many claims too often flags you as high-risk, possibly leading to cancellation.
  • Policy Terms Violation: Using your vehicle for unauthorized purposes against policy terms can result in cancellation.
  • Poor Driving Record: Multiple violations or accidents can lead to cancellation and the need for high-risk insurance.

To fully understand your insurance cancellation and determine what to do next, you should start by identifying its reason. Note that if you initiated the cancellation, much of the information in this article may not be relevant to your situation.

Common reasons for auto insurance policy cancellation

Impact of Insurance Cancellation on Your Record

A cancelled policy, especially due to non-payment or misrepresentation, can stay on your record, affecting your ability to secure new insurance. In Ontario, such incidents can impact your insurance history for several years, making it challenging to find affordable coverage.

Furthermore, a cancelled auto insurance policy can immediately suspend a driver’s license until new insurance is obtained, making driving illegal. Additionally, cancellation may risk repossession of financed or leased vehicles, as lenders require continuous full coverage. 

How Long Does Cancelled Insurance Stay on Record?

In Ontario, a cancelled policy for non-payment or other significant reasons typically impacts your insurance record for up to three years. Still, it could be for as long as ten years. The duration of this period may differ depending on the issue’s seriousness and the insurer’s specific policies. Finding affordable insurance can be more challenging during this time, as insurers view you as a higher risk.

What To Do If Your Auto Insurance Policy is Cancelled?

If your auto insurance policy is cancelled, understand its reason, which will guide your next steps. Canada insurance companies must provide a notice explaining the cancellation’s cause and timeframe. A 10-day notice is typical for non-payment, while other reasons might allow up to 45 days. Upon receiving this notice, you have two options:

  • Contest the Cancellation: If you believe the cancellation is unjustified, present your case to the insurance company, showing evidence of being a low-risk driver. The insurer will review your case for potential policy reinstatement.
  • Find a New Policy: If contesting isn’t feasible, immediately seek a new policy, especially since driving uninsured is illegal in Canada. The ease of finding a new policy varies based on the cancellation reason. Consider consulting a broker for high-risk insurance for serious issues like non-payment or fraud.

Steps to Getting a New Insurance Policy After Cancellation

  1. Assess Your Situation: Understand why your policy was cancelled. This knowledge is crucial for addressing the issue effectively.
  2. Check Your Record: In Ontario, your driving and insurance records significantly secure new coverage. Obtain a copy of your record to understand what insurers see.
  3. Explore High-Risk Insurance Options: If your policy was cancelled due to high-risk behaviour, such as multiple at-fault accidents or traffic violations, you might need to seek high-risk insurance. This type of insurance is tailored for individuals with a less-than-perfect driving record.
  4. Compare Quotes: Explore and contrast quotes from various insurance companies. Certain insurers focus on offering policies to drivers who have previously had their insurance cancelled.
  5. Be Transparent: Honesty is crucial. Disclose the reason for the cancellation of your previous policy. Being transparent can foster trust with prospective insurance providers.
  6. Consider Payment Options: Discuss payment options with your new insurer if your policy was cancelled due to non-payment. Some insurers might provide flexible payment options to assist in managing your premium payments more efficiently.
What to do if your auto insurance policy is cancelled

The Bottom Line

Securing car insurance after a policy cancellation in Ontario requires understanding the reasons behind the cancellation, the impact on your insurance record, and the specific challenges related to non-payment. By assessing your situation, being transparent with insurers, and exploring high-risk insurance options, you can navigate the path to obtaining new coverage. Remember, a proactive and honest approach is key to rebuilding your insurance history and securing a policy that meets your needs.

Congratulations! You made it to the end!

Now, here is the easy part: complete your quote in under 2 minutes

Discover More About

Learn about the steps of how to get your car back from impoundment and the implications it might have on your auto insurance.
Read our article to learn the truth behind the 12 most common car insurance myths to ensure you make informed insurance decisions.
The Alberta government has announced a comprehensive reform of the auto insurance system, set to take effect in 2024. Read on to learn more.

Even More Ways To Save