Buying a new car can be an exciting experience, but it’s a milestone that comes with some paperwork. In addition to warranty and financing agreements, insurance coverage is an integral part of the purchasing process. Before you become the proud owner of a new automobile, most dealers require you to insure your new ca
r and to prove that you’ve added your purchase to your auto insurance policy.
But what happens if you purchase your new vehicle in a private sale and get in an accident on the way home or a few days later before you remember to update your insurance? The good news is that you likely have coverage as long as you have a current auto insurance policy for another vehicle, but this coverage only lasts for a short period.
Do I have coverage for my new ride if I get in an accident before updating my insurance policy?
Fortunately, it’s common for Canadian insurance companies to include an automatic coverage period for drivers who buy a new vehicle. Typically, you have 14 days of protection under your current auto policy when you buy a new car.
However, newly acquired automobile insurance policies vary by insurer, so the only way to know if you still have coverage is to check with your insurance company. If your policy doesn’t include coverage for a new vehicle until it’s directly added to your policy, you won’t be covered after an accident.
Even if you do have 14 days to update your policy after driving your shiny ride off the lot, it’s best to add insurance to a new car as soon as possible to ensure you have enough coverage for your new set of wheels.
Insurance companies could deny portions of your claim on the grounds that your vehicle is misrepresented on your unamended policy. The current coverage you carry is the only coverage that auto transfers for 14 days. So, if you have an old car with no collision or comprehensive insurance, you would not have that coverage on the new car should you get in an accident.
When do I need to prove I have insurance for my new car?
Some provinces like Nova Scotia and British Columbia allow you to add your old vehicle’s license plates to a new car that you haven’t registered. In Nova Scotia, for example, residents have 30 days to register a new vehicle after switching their plates.
In Ontario, it’s illegal to transfer your license plates to a new vehicle without registering it first. To register a new car in Ontario, you need to prove that you added insurance to your new vehicle, which you also need to provide before purchasing a used or new vehicle at a dealership.
It’s illegal to drive without insurance in every Canadian province, even if you recently purchased a new car that has no insurance coverage. Suppose you are pulled over or involved in an accident driving an uninsured vehicle that belongs to you. In that case, you can face high fines and consequences like a license suspension and more expensive future insurance premiums.
What are the insurance-related driving charges in Ontario?
There are two possible charges for driving without insurance coverage in Ontario:
- Failing to show proof of insurance after a request made by a police officer.
- Driving an uninsured vehicle or allowing a motor vehicle to be operated without insurance.
If you have insurance but can’t access your pink slip when an officer requests it, you can fight the first charge by showing proof of your insurance coverage in court. Most auto insurance providers also offer digital copies of your insurance documents so accessing them is more convenient.
What are the penalties for failing to show proof of insurance in Ontario?
Failing to show proof of insurance will result in less severe penalties than a conviction for driving without insurance. These penalties include:
● An $85 to $500 fine plus a 25% surcharge.
● An $85 fine and surcharge for someone driving your car who doesn’t provide proof of insurance.
● Potentially a $5,000 penalty if a further investigation proves you weren’t insured at the time of the initial charge.
What are the penalties for driving without insurance in Ontario?
There are several potential penalties for driving without insurance in Ontario, including fines, license suspension and the impoundment of your vehicle.
Unlike failing to stay at the scene of a collision, driving without insurance is not a criminal offence and will not add demerit points to your license. Still, the consequences of driving without insurance can be a significant burden on your wallet and ability to drive in the future.
Penalties for driving without insurance include:
● The first-offence fine is between $5,000 and $25,000.
● Driver’s license suspension for 30 days to a year.
● The fine for driving without insurance more than once can range from $10,000 to $50,000.
In addition, a 25% surcharge will be added under the Provincial Offenses Act, and your vehicle can be impounded for a maximum of three months.
Driving without insurance impacts your insurance rates.
In addition to legal fines and penalties, a conviction for driving without insurance will increase what you pay for coverage in the future. As a result, your premiums could rise to high-risk insurance rates, which are typically 2-3 times the cost of standard auto insurance policies.
Insurance companies check your driving records to determine what you pay for coverage. A conviction for driving without insurance will stay on your driving record for three years. However, If your license is suspended for a year, the suspension record won’t clear until your license is reinstated, four years after your uninsured driving conviction. Therefore, maintaining a clean driving record for 3-4 years will make you eligible for standard insurance rates once more.
If I get in an accident without insurance, will I have to pay the other driver’s fees?
You could be sued for damages, including medical expenses and vehicle repair or replacement, especially if an insurance investigation finds you fully or partially responsible for the accident.
Uninsured Automobile Coverage is legally required in Canada and provides coverage for healthcare and vehicle damage for insured drivers and their families. Unfortunately, if you don’t have coverage at the time of an accident, you won’t have access to financial compensation.
Ontario has a no-fault insurance system: Whether the other driver is 0% or 100% responsible for the accident, an insured driver’s insurance company will pay for covered losses up to the policy holders’ coverage limits. If an insurance adjuster finds a driver more than 25% responsible for an accident, they can receive compensation for the collision, but their insurance premiums will increase.
Insurance companies prepare for accidents with uninsured drivers by providing mandatory uninsured vehicle coverage to all of their clients. After getting into an accident with a new, uninsured vehicle, the consequences of a denied insurance claim can be expensive but manageable. Even if you have two weeks of automatic coverage for a new set of wheels, it’s always best to tell your insurer before you purchase a vehicle, so you can find out how it will affect what you pay for coverage and update your policy.
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