The Residual Auto Insurance Market and High Risk Drivers
As a driver in Ontario, the last place you want to find yourself when it comes to auto insurance is in the residual market. If you’ve been placed in the high risk category, this is exactly where you will be.
Not sure what the residual market refers to and how it works in Ontario? Let’s go over this facet of our insurance industry…
Every driver (that is legally allowed to drive and own a car) has the right to insurance. But if you’re a high risk driver, you already know that many companies are not prepared to offer you auto insurance. This is where the residual market comes into play. Drivers in the residual market are those that cannot get insured via regular channels. To deliver on the individual’s right to be insured, the Facility Association steps in to help offer coverage to these drivers. The Facility Association is an organization that all insurance companies must be a part of. If you’re interested in learning more, the Insurance Bureau of Canada has more information on the Facility Association here.
If you’ve been deemed a high risk driver you are, unfortunately, in the residual market for auto insurance. This means that you will pay higher rates to insure your car than other drivers in Ontario. In fact, in Ontario last year (2018) the number of policies in the residual market for auto insurance went up by 29.2% over the previous year (2017) – source: Canadian Underwriter. According to the article on Canadian Underwriter, insurers in our province are struggling with the rising costs of claims.
So, more and more drivers are being pushed into the residual market. It’s more important than ever to keep yourself out of the high risk driver category to avoid paying more for insuring a vehicle.
If you find yourself in the position of being in the residual market, we recommend you check out some of our other resources on high risk auto insurance:
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