There are many things that will impact your car insurance policy and premiums, and one of them is the car you drive. Although some drivers think they don’t have to tell their providers when they change car ownership in Ontario, it’s actually important to notify them as soon as possible.
Today we’ll talk about why this is and how it can even benefit you. Take notes before you sell your old car!
Notifying your insurance company when you replace your old car
You have to tell your insurance provider when you change car ownership, plain and simple. It’s written in the Auto Insurance Consumers’ Bill of Rights. Not only could the new car change some of the terms of your auto insurance, but it could also impact your insurance rates (even in a good way).
But if you’re worried about not being covered as soon as you buy the car, don’t fret. Most insurance providers offer a grace period of 14 or 15 days, giving you time to get all the ownership and registration details sorted out before getting on the phone with them. You do get some breathing room to add insurance to the new car. However, you should still tell your insurance company as soon as possible any time something changes that could affect your policy, including:
- Vehicle change.
- Address change.
- Marriage or relationship changes (usually related to secondary drivers on your policy).
It’s also important to notify your insurer if you assume joint ownership of your car, as that will change the risks associated with your policy (and possibly your rates, depending on the other person’s driving record).
Staying silent when you change car ownership in Ontario is a bad idea
If you fail to tell your insurance company about the vehicle ownership change within a reasonable period of time, then you risk not being covered in case of an incident.
For instance, if your insurance company offered a grace period of 15 days and you got into an accident 20 days after buying the car, then your provider may refuse a claim—or potentially even cancel your policy—if you didn’t tell them about the ownership change.
Informing your vehicle insurance provider could have benefits
Insurance providers calculate premiums based on a number of different factors, and some of the most significant are the make, model, and year of the vehicle you drive.
Moreover, insurance companies consider a great number of details when determining premiums for different cars, including things like:
- Claims history with that vehicle
- Average repair costs
- Safety ratings
- Theft rates
It’s no secret that some vehicles are more expensive to insure than others, so your rates could actually go down when you change cars. For example, say you traded in a 2016 Hyundai Accent for a 2018 Toyota Camry. Although you might think the insurance would be higher for the newer car, it’s possible that your premiums could go down because the Camry has a much better safety rating than the Accent.
It’s in your best interest to alert your insurance provider as soon as possible when you change vehicle ownership in Ontario because this is the only way to ensure you’ll be covered in case of an accident.
Moreover, your insurance rates may change when you buy a new car, and you could end up saving money on your premiums, so tell your provider promptly about any changes that could impact your policy, including a new car.
P.S. Keep your policy during any test drives if you’re selling a car privately!