Auto Insurance in Canada

Time limits

If you’ve been involved in a collision that may result in a claim, contact your insurance representative as soon as possible. You must notify your insurer as soon as possible (some policies specify within seven days) about any accident involving the automobile:

• that must, by law, be reported to police; or
• for which you intend to make a claim under the policy.

Most policies state that a written declaration (”proof of loss”) must be made within 90 days of the accident. If you don’t make your claim within this time, your insurance company may not be legally bound to honour your claim. In practice, however, most companies will honour a claim made within one year if there is a reasonable explanation of the delay.

If you are making a claim against another driver, you should notify him or her as quickly as possible. It’s also a good idea to notify the other driver’s insurance company of the claim yourself; don’t assume that the other driver has done so.

In the unlikely event that you intend to sue your insurer, check your contract for any time limits that may apply.

Preventing further loss

If you are involved in a collision, you are responsible for protecting your vehicle from further loss or damage. The insurer, however, will pay for the damage if you have purchased Collision or All Perils coverage. You must not order repairs, other than those needed for protection of the vehicle from further loss or damage, until the insurer has consented or has had a reasonable amount of time to inspect the damage.

You cannot simply abandon a wrecked vehicle to the insurer without the insurer’s consent. However, when your insurer has replaced or paid for a wrecked vehicle, the wreck or whatever is left of it (salvage) belongs to the insurer.

You must not voluntarily assume liability (responsibility) for any collision or settle any claim, except at your own cost.

Claims adjuster

Once your insurance company has been advised, a claims specialist – an “adjuster” – will be assigned to look after your claim. The amount you receive for your claim will depend on the type of coverage you bought. The adjuster’s job is to determine the facts relating to the claim and the extent to which the claim is covered by insurance. The adjuster, who is paid by the insurance company, also attempts to reach an agreement with the other people involved regarding the amount of their loss and extent of their responsibility.

When you don’t have Collision coverage

If the collision was the other driver’s fault, you could claim payment of your damages from the at-fault driver. (In Ontario and Quebec, Direct Compensation - Property Damage may apply, in which case you would claim from your own insurer.) If it was your fault, you will be personally responsible for your damages.

In Ontario, drivers who do not carry car insurance as they are required by law to do cannot sue another driver to claim for reimbursement for damage to their cars.