Will car accident settlements in Ontario affect my insurance rates?

Plenty of factors impact the vehicle insurance rates that drivers pay in Ontario, and your claims history is one of the most significant.

However, some things aren’t always that cut and dry, and there are instances when a settlement won’t impact your rates. To help explain the ins and outs of this topic, we’ll talk about when and how much car accident settlements in Ontario could affect your car insurance rates.


The importance of fault in insurance settlements

One of the most critical things that will determine whether or not your rates go up after a settlement is fault.

When a claim is made, your insurance company will use the Ontario’s Fault Determination Rules to decide which driver was responsible for the accident. In cases when the other driver is determined to be at fault (the one who caused the accident), and you’re not at fault, your insurance rates likely won’t be impacted at all.



However, if the insurer determines that you were at fault for the accident, then there’s a chance your rates could increase. The same is true with accidents that involve pedestrians, after which the insurance company will determine fault between drivers and pedestrians.


How much will an at-fault accident settlement impact my premiums?

Unfortunately, there isn’t an easy answer to this question because there are a number of factors at play.

One of the most important is how much fault the insurer places on you. Insurers can allocate fault between zero and 100 percent to a driver, and anything above 25 percent could lead to a premium increase, depending on how much blame they assign to you. However,when insurers assign a fault responsibility below 25 percent for car accident settlements in Ontario, then drivers’ insurance premiums can’t be increased.

Your driving record is another important factor. For example, if the accident in question was minor and was your first at-fault accident in three years, then new laws prohibit insurance companies from increasing your rates as long as certain criteria are met. Otherwise, your rates may only increase slightly after an at-fault accident if you have a clean driving record.

Generally speaking, you can expect that your rates will rise—perhaps drastically—only if you have a history of being in several at-fault accidents over a moderate period of time.



Differentiating between claims and car accident settlements

When you make a claim, the insurance company still has to review the claim and determine fault. The settlement, however, is what happens once the insurer agrees to pay. It’s important to talk about the two separately because you can make a claim to your insurer, but if you withdraw the claim prior to settlement (if you’re allowed), then it won’t impact your premiums.

Drivers’ rates only have a chance of rising after car accident settlements in Ontario officially close.

Many drivers think that as soon as they submit an auto insurance claim, their rates will automatically increase. But this isn’t always the case, and there are many instances when a settlement won’t impact premiums. Especially during not-at-fault accidents, your rates won’t increase at all, and even in some cases when you’re found to be at fault, your rates still may not go up after a settlement.

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