mother and son in a car learning to drive

November 14, 2017

Ask Adam: Car insurance special

6 min read


In this installment of Ask Adam:

  1. Driver training & lower car insurance
  2. Transferring driving experience to Ontario
  3. How auto insurance companies set their rates
  4. Less-known ways to save on car insurance
  5. Insurance company with best rates in Ontario
  6. Why your car insurance rate could change
  7. How fault is determined in a car accident
  8. Missed car insurance payments
  9. Cost of commercial vs. personal auto insurance

Have a question for Adam? Just send it to us via Facebook or Twitter with the hashtag: #askadam.

Hi Adam,

If I take driver training, will it affect my car insurance rate? Is driver training worth it?

Patrick from Toronto

Absolutely you should take driver training. It’s worth it for your own safety, but also it’ll pay off on insurance. One example is an insurance company that has a 0 to 6-star rating system. Instead of starting you off as a 0 star, they’ll start you off as a three-star; halfway to perfect if you take the driver training. Each company treats it a little differently, but they will all offer discounts for having driver training.

Now what to look for in a school: you want to make sure your school is certified by the Ministry of Transportation (MTO). There have been instances of fraudulent schools setting up and handing out certificates that aren’t MTO certified.

So if you just go to a driver training school and they’re not certified by the MTO listed on their website, it could be that you’d pay for a course but wouldn’t get any discounts. It’s important that before you enroll in a program, look on the Ministry’s website to make sure the school is on there, and that way you can get some savings.

Hello Adam,

I’ll be moving to Ontario next year, is there anything that I should bring from out of province to help with getting Insurance?

Carol S

Yes, what you want is called letter of experience (LOE). You want to ask your current Insurance Company from whichever Province or state you’re in to give you a letter of experience that includes the start and end date of your insurance, as well as any accidents you’ve had. If you don’t have a history inside the Ontario License system, you can use a letter of experience from your insurance company to get the insurance experience to transfer on. Experience will transfer from most everywhere in North America and some other countries across the world (that drive on the same side of the road and have a similar type system – certainly North America) and there’s a short list of other countries around the world.

Hi Adam,

I’ve been told that home insurance in Ontario is a free market, with insurers being able to do whatever they want in terms of setting the rates. Is it the same thing with car insurance?

Peter – North York

No, car insurance rates are regulated, and every rate increase requires approval from the government. A body called FSCO will approve or deny the rate request from the insurance company. How this works is the insurance companies submit all of their results – both in their rating and premium taken in, and the claims paid out, and the total results. So if they lost money, they can file for a rate increase, and they’ll get approved or denied by the government.

What commonly happens is that an insurance company will file for say a 3% to 5% or even a 10% increase, and the government will review that rate request and not only just approve or deny it, but often come back with a variance. So an insurance company could file for a 5% rate increase and what would come back is only approved for a 2%. Now we’re speaking in a very blended rate across the board, as there are a lot of different territories every insurance company has to file for. So Whitby would be different, as would Thunder Bay, Toronto, or Hamilton, and together they have to file for all of them.

Conversely, if an insurance company is making money hand-over-fist with record-setting profits, the government can step in to mandate a rate decrease. In fact, it’s happened where insurance companies have gone in for a rate increase, say a 5% increase, and after reviewing the results, FSCO has actually mandated that they would have a 3% decrease.

Whatever the results of the rates changes are, they have to file them publicly. You can see exactly how much or how little money the insurance companies are making or losing by looking on the FSCO website.

Hi Adam,

What are some cool ways that I can save on my car insurance that most people don’t know about?

Tina B, Scarborough

One of the biggest things that affects your car insurance is your experience and how many years you have under your belt of accident-free driving. A couple things that are fully in your control, and easier to control than time are:

  • New car discounts – many companies give new car discounts for vehicles with better crash test ratings.
  • Automatic braking – A lot of the insurance companies are coming out with automatic braking discounts.
  • Telematics – Another one in your control is telematics. A number of insurance companies, maybe a half-dozen, offer telematics discounts; industry jargon to say that you can have essentially a cell phone enabled device that plugs into your car and reports back to the insurance company how you’re driving. Your acceleration, braking, time of day, and usage are monitored, so with really good habits and careful driving, you’ll see lower rates. Most of the insurance companies mandate that you only have to keep a telematics device in your car for nine months, and you can achieve up to a 20 or 30% discount.
  • Winter tires – You also get a discount for winter tires, which was mandated by law, so every insurance company has to offer a discount for buying winter tires.

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Hi Adam,

Which Insurance company has the best rates right now in Ontario?

Seb, Toronto

There’s no one company that has the best rates for every driver. Each company goes through cycles of competitiveness and profitability, so how good a rate is for you right now is only relevant in the context of what the other companies are also offering. So your insurer might stay flat, but there could be other insurance companies that come out and offer a better rate, or be more competitive, or want to gain some market share. Another scenario is that your insurer could have made bad risk selection decisions, and then their rates go up, even though you have a perfectly good driving record.

So no, there’s not one company that’s best for everyone. Every company is targeted for different people in different cities with different records, and it’s a constantly changing process.

Hey Adam,
If got a really good rate this year, is my insurance rate going to be the same next year? Is there a possibility that it will increase?

Odi – Thunder Bay, Ontario

There’s a fairy unlikely chance that it would stay exactly the same. The marketplace is moving; your driving record is moving; so all things being equal, if you don’t crash and don’t get any tickets, you should actually be able to see a little bit of savings because of that better record. There’s a number of different things happening with:

  • Government mandating 15% reduction on auto insurance
  • Companies losing money and filing for rate increases
  • New competitors to the marketplace

It’s constantly moving, so even if you have a perfect driving record, your rate will almost certainly change year-over-year. It could get better; it could get worse; you could receive a 5 or 10% discount for yourself; or the marketplace could go up 10 or 15%.

Hi Adam,

If I’m involved in a car accident, who decides who’s at fault, the broker or the insurance company?


Fault determination is not up to the discretion of the companies, it’s pretty much laid out by the Insurance Act.

The Insurance Act is an act passed as law by the government that has fault determination rules, which determine for example, if car a rear-ends car B, then car A is at fault; or if Car B sideswipes car A, car B is at fault; and so on. It tries to outline every situation, determining which car is 100% at fault or which situations have both cars 50% at fault.

99% of situations fit within scenarios that are already determined based on the rules of the road, who would be at fault.

Hi Adam,

What happens if I miss a payment on my car insurance?

Samir, GTA

If you miss a payment you’ll get a registered letter from your insurance company to the address on file. From there, you’ll have 15 days to make good on that payment before your policy gets cancelled for non-payment. If your policy gets cancelled for non-payment, you will actually lose some of your insurance options; some of the companies that would have ensured you without that on your record now likely won’t insure you, and some of the other companies that will insure you will have a surcharge. It’s really important that you don’t miss your insurance payments, and that you certainly don’t let your policy cancel for non-payment, because that’s a mark on your record for at least 6 years.

Hi Adam,

I’m thinking about getting a car for my business. Is the insurance going to be a lot more expensive than a car for personal use?

Patty L, Brampton

No, not necessarily. Your business or commercial use vehicle can often be less expensive than a personal use. It depends on what business use case you’re using it for, where you live, and how far you would normally be commuting. It’s certainly not a hundred percent the case that you’ll spend more.

Note: The information above is for general purposes and does not constitute legal advice. Be sure to talk to your broker if you have more specific questions about insurance, and especially if you need answers that are specific to your circumstances.

“Ask Adam” is a monthly feature where Adam Mitchell takes the mystery out of insurance with plain-language answers to the questions that matter to you. Have a question for Adam? Just send it to us via Facebook or Twitter—and be sure to add the hashtag: #askadam.


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author avatar
Adam Mitchell Chief Executive Officer

Adam Mitchell is a third-generation insurance broker and CEO of Mitch Insurance, a family-run business for more than 70 years. Adam's awards and accolades include IBAO's Young Broker of the Year in 2019, Brokerage of the Year in 2018, and Innovator of the Year in 2016. He’s also frequently included in IBC’s Top 10 Brokerages, Elite Brokers and Young Guns lists.

Adam loves golf, squash, surfing, kiteboarding, skiing, deep-fried anything, his mom and babies.

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