Honesty really is the best policy, insurance-wise

Honesty really is the best policy, insurance-wise
It is also a legal responsibility for Ontario consumers to keep their insurer apprised of any changes on who is going to be regularly or even occasionally driving your vehicle.

A recent case in Ontario highlighted just how important it is for consumers to be completely truthful with their auto insurers.

Zalimoon Seetaram and Lakeram Sitaram lost a judgement that ended up costing them $15,000. Their insurance provider, Allstate, won the case after the couple neglected to add their son to their auto policy and he was involved in an accident.

That situation provides a stark example of how much trouble a person can get into when not telling the full truth to insurance companies.

“Depending on what you have hidden from the insurance company, they may choose to cancel the policy or set it to non-renew, meaning that after you reach the end of the term the company will not insure you again. This drastic action is usually reserved for serious situations where the policy would never have been issued in the first place has the company known the truth,” according to a post at InsuranceHotline.com.

It’s in your best interest to fully disclose all relevant information to the insurer, who is in the business of not only making money, but minimizing risk, according to Windsor, Ont., broker Insurance Hunter. “Giving leeway for clients to get away with not disclosing things is a bona fide way to expand risk and lose money when claims come in. Thus, many insurers will include clauses in their client agreements that void coverage when pertinent information has been altered or omitted.”

It is also a legal responsibility for Ontario consumers to keep their insurer apprised of any changes on who is going to be regularly or even occasionally driving your vehicle.

“Section 1 of the Ontario Automobile Policy (OAP 1) is clear about the responsibilities of the policy owner, as demonstrated in this excerpt: ‘You also agree to let us know of any change that might increase the risk of an incident or affect our willingness to insure you at current rates. You must promptly tell us of any change in the information supplied in your original application for insurance, such as additional drivers, or a change in the way a described automobile is used,’” writes Joanne Will in The Globe and Mail.

If someone else gets into trouble, it is the owner of the vehicle and the purchaser of the insurance who gets dinged, so don’t think it’s okay to hand over your keys to anybody, writes Lorraine Sommerfeld of Driving.ca.

“It may seem like no big deal if a friend or family member asks to borrow your truck for a move, or if you ask them to drive your car if you’ve had a few too many. But it’s your responsibility to make sure they hold a valid driver’s licence. Any collision they’re involved in will count against your insurance record, but if they’re not licenced, you won’t have a claim to make.”

The Ontario government, through the Financial Services Commission of Ontario which oversees the insurance and financial industries in the province, provides a handy checklist for consumers to consider before approaching a company or broker.

In B.C., the public auto insurance company Insurance Corporation of British Columbia (ICBC), under which all residents must adhere, decided to enact a new policy that allows for you to occasionally hand over your keys, without incurring big trouble if that person gets into an accident.

“The new $50 fee is called ‘unlisted driver protection,’ and the public insurer is recommending that anyone who hands the keys over to a driver not listed on their policy to buy it,” according to Global News.

This extra protection is worth the cost, or you could pay $15,000 like Zalimoon Seetaram and Lakeram Sitaram did. It’s your choice.

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