Auto insurance for the majority of drivers on the road in Ontario is relatively simple. You pay your insurance every month, grumble about the expenditure, and then are really happy it’s there when you come out of the movies just in time to see someone banging into your stationary, parked car.

But for some people, insurance may be refused if you apply for it, or you may lose your insurance when it comes time to renew your policy. It may seem mysterious and unfair to some, but there are a lot of statistics, math and old-fashioned historical precedent at work here when these decisions are made.

Here are a few of the rules that insurance underwriters go by when they evaluate your insurance case and make a decision about “yay or nay.”


It’s Not Just You

One thing you may not realize when you and your insurance record are being evaluated is that the car being insured also plays a role in the consideration. It’s common sense that if you’ve had a lot of incidents like accidents or tickets, this will have some effect on your insurance.

But if the car itself has been involved in multiple incidents, this also plays a role. For example when evaluating at-fault accidents, that is, accidents in which you, the driver, are responsible, the vehicle is also considered at fault. This means that even if you loan your car to a friend, and that friend gets into an accident, that accident, with your car, is going to affect your rates as if you’d been in the accident yourself.


Experience Counts

Another thing that is going to play a role is how long you have been licensed to drive. Generally speaking, it’s broken down into two categories. If you’ve been licensed for less than four years, you may fall into a harsher category of evaluation depending on the insurance company’s individual policy. If you’ve been licensed for over four years, then you’ve got a bit more leeway before an insurance re-evaluation is called for, especially if you’ve been without any incidents up until now.

That’s why if you’re a new driver, it’s especially important to be more mindful when you’re on the road. Too many errors and you could find yourself unable to drive, not because your license was suspended, but because you’re no longer insured. Rules and penalties are harsher for newer drivers making frequent errors so early in their driving life.


Convictions Play an Inconsistent Role

In the past, insurance companies had an open explanation for how your rates would be affected by driving convictions. If you got a ticket, your rates would increase by 10%, if you got a second, rates would increase by 15% and a third would get a 25% increase. This was pretty easy and straightforward to understand.

Today, however, insurance companies use what is referred to as an individualized pricing or rating system. This is far more arcane, and they do not explain which equations or algorithms are used to finally arrive at their rate increases. What this means is that one driver may suffer a first offense and get a price hike of $1000 annually on their first minor conviction. Another driver with the same conviction will get a $200 increase to their rate, despite the fact both drivers are with the same insurance company and, at least, superficially, appear to have similar traits and characteristics. It’s difficult to get a clear fix on the numerous factors that now come into play when arriving at these final rate changes, making it more difficult to predict a specific individual’s pricing after driving violations occur.