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Can I require my insurance to authorize the use of original equipment parts when repairing my vehicle? My policy says they will return my damaged vehicle to "pre-accident condition."

Possibly. This will depend on the terms of your auto insurance policy. Some automobile insurance companies automatically use original equipment manufacturer (OEM) parts. Others use non-OEM parts.

You may be able to insist on OEM parts, but where they aren’t required you will generally have to pay the difference in cost.

Can my insurance company refuse to pay my claim?

Most insurance policies include a section in your policy that defines what you, the policyholder, are required to do when an accident occurs. This information in your policy sets out the general as well as any specific procedures that you must follow in order to have your claim covered by the insurer. It's essential to follow these procedures carefully, since payment of your claim may depend on your doing so.

Additionally, they can refuse to pay your claim if they find that you have not disclosed all required information or given false information with respect to the claim or during any point in time from policy application onward.

What factors can an insurance company look at to determine if they will insure me?

In reality anything they want.

How high should I set my deductible?

As high as you comfortably can. A small increase in your deductible can allow you to make a big increase in more important coverage, like liability.

Am I covered for a car accident that happens in another province?

A car insurance policy is generally good throughout the country. However, some policies change their coverage a little depending where you have an accident. Be sure to check your policy or contact your insurance agent for any specific restrictions on your policy prior to out of province vehicle use.

How do I get the most car insurance for my dollar?

Keep your deductibles high and your liability limits high. You'll get a lot more coverage for your cash that way

When can my premium rates increase?

Whenever you renew your policy, apply for a new one, or change your insurance coverage / contract.  e.g. change drivers or vehicles, or are involved in an accident or traffic violation.

How does a car insurance company set my premium?

Insurance companies consider several factors that vary between insurance companies.. These factors include where you live, the kind of car you drive, your age and gender, the level of coverage you want, and your driving record, previous claims, among other things.

What is no fault insurance?

No fault insurance covers the injury-related expenses of the policy holder in the event of an accident, regardless of who was at fault.

Your insurer will automatically pay for your damages, up to your policy limits, regardless of who was at fault for the accident. In exchange for this guaranteed payment, you give up some of your rights to sue the other driver(s) involved in the accident. By the same token, you are also protected from being sued in the event you are at fault in an accident.

No-fault insurance can restrict recovery for pain and suffering as well as limit loss payments. Depending on your province, you may be allowed to sue for non-economic damages if the amount of these damages exceeds a specific amount. Be sure to check with you insurance agent for further details.

What is a deductible?

It's the amount of money that you agree to pay before a certain auto insurance policy kicks in. Deductibles are designed to cut down on insurance costs by eliminating small or frivolous claims. The higher the deductible you're willing to pay, the lower the premium.  You should select your deductible based on the amount you are prepared to pay out of pocket in the case of an occurrence.  Despite having an insured loss, in some cases, it may be advantageous to pay out of pocket so as not to have a claim that may negatively affect your insurance rates in the future.

What is comprehensive coverage?

This policy covers the cost of repairs to or replacement of your vehicle should it be stolen, vandalized, struck in a hit-and-run, or damaged by an "act of God." Covered events vary from policy to policy but usually include fire, flood, and falling objects. This policy is generally optional.

What is collision coverage?

This policy helps pay for repairs or fair market replacement cost if your car is damaged in an accident caused by you or an authorized driver. This policy is generally optional.

What is uninsured motorist coverage?

This policy covers the cost of injury or damage caused by another driver who is not insured. It covers the policy holder, authorized drivers, and any passengers. It usually consists of separate limits for bodily injury and property damage. This policy is required in some jurisdictions.

What is medical payments coverage?

This policy pays the medical bills of the covered driver, family members, and passengers when injured in an accident, regardless of who was at fault. This coverage is required in some states, but not in others.

What is property damage coverage?

It's the part of liability coverage that insures you against the cost of damage to another's property caused by you in an automobile accident. "Property" includes other cars, houses, fences, telephone poles, etc.

What is bodily injury coverage?

It's the part of liability coverage that insures you against the injury you cause to others in an auto accident. It consists of two figures. One limits the cost of injury coverage per person injured, and the second limits the total dollar amount of injury coverage (for everyone injured.

What is liability coverage?

Liability coverage insures you against the cost of injury and damage you cause to another in an automobile accident. It's made up of two policies, bodily injury liability, and property damage liability. Auto liability insurance is required in most regions.

If someone borrows my car, are they covered under my auto insurance?

As a general rule, auto insurance coverage actually follows the vehicle, not the driver. So if your car is involved in an accident, the car typically receives the full coverage provided by the auto insurance policy, regardless of who is driving.

Auto insurance policies normally provide coverage for your car if it is driven by any of the following people:

• You, the "named insured"
• Your spouse, as long as he or she lives in your household
• Other family members who are related to you by blood, marriage, or adoption
• A foster child who lives in your household
• A child who is away at college but still considers the address listed on your policy as a permanent address
• Anyone to whom you lend your car

Your insurance company may require that certain conditions be met in order for other drivers to be covered under your policy. For example, anyone who drives your car must typically be a licensed driver. Additionally, most insurance companies require that anyone driving your car be doing so with your permission.

Because these conditions can vary, it is important to check your policy carefully and make sure you understand any limitations that might apply before you allow others to drive your car.

Do I get penalized on my insurance for speeding tickets? How does the insurance company know if I have received any tickets?

Many insurance companies will forgive one moving violation, like a speeding ticket (less than 30 km/h over the limit), but they are unlikely to overlook two in a three-year period. If you want to stay at the highest rating level, and pay the least for your insurance, you can't have more than one moving violation in a three-year period. Otherwise, you drop to a lower classification and pay up to 20 percent more for your insurance. A third conviction in three years could mean an increase in your insurance premium of at least 25 percent. It might even oust you from the regular insurance market and force you into the so-called "high-risk" market where you could pay as much as 250 percent more for your insurance.

However, unless you are applying for insurance at another company, or your current insurance company happens to do a random check on your Motor Vehicle Record (MVR) (which it might be more inclined to do if you were involved in an accident), it is unlikely that a moving violation would come to light.

A moving violation stays on your MVR for two years. However, if you are applying for insurance at another company, you will be asked whether you have had any tickets in the last three years.

How long do I have to go back in reporting an accident or traffic ticket on my insurance application? Will the company find out about it if I can't remember?

Generally, you will be asked for details of any accidents or claims during the last six years (including claims under your Comprehensive coverage, like theft, windshield damage, etc.). You will also be asked about your conviction record in the last three years. This includes any offences relating to the operation of your car, like speeding tickets, seat-belt infractions, or other moving violations. You can obtain your Motor Vehicle Record (MVR) for the last two years from the Ministry of Transportation, but insurance companies require a three-year history. Therefore, if you are not sure of convictions or accident dates, ask your current insurance provider, or tell your prospective insurer you can't remember exactly. If you say you haven't had any tickets in the last three years and the insurer discovers otherwise -- and it will -- it may refuse your application or charge you more for your coverage. Any inaccuracies or omissions in your policy, intentional or not, could result in your policy being declared invalid.

Therefore, it's a good idea to keep a record of the dates of any tickets, accidents, or claims, because how many of us can remember if that minor accident happened six years ago or seven? It makes a difference to the insurer.

If I have claims under my Comprehensive auto insurance, will my rates go up?

They shouldn't, because Comprehensive claims are not considered at-fault accidents. Remember, rates increase because of fault, not because of the money paid out by the insurance company to settle a claim. HOWEVER, you should be aware that, although insurers in certain provinces cannot raise your rates or refuse to renew your automobile policy because of Comprehensive claims, they can raise the deductible on your Comprehensive coverage, or even delete that coverage altogether if they think you have had more than your share of these kinds of claims. In other provinces, they might even refuse to renew your entire auto policy as a result of frequent Comprehensive claims. Although Comprehensive losses are not your fault, insurers believe that these kinds of claims can, to a certain extent, be controlled by taking certain precautions (eg., a car that is broken into repeatedly for its stereo equipment, for example). Even though, in most cases, Comprehensive claims are beyond your control, they still go on your insurance record, so don't assume they won't affect your rates or your coverage.

If I stop driving for a number of years and then start again, will I have to pay for my insurance as if I were a new driver?

No, you shouldn't -- and in some provinces, you can't -- be treated as a new driver. Although it was more common in the past for insurance companies to penalize drivers who have a gap in their insurance coverage, this happens less frequently now. (The exceptions would be if the lapse was due to cancellation of your policy for non-payment of premium, an accident that was not reported to the insurance company, or suspension of a driver's license because of a conviction like impaired driving.) However, to be on the safe side, you should consider returning to your previous insurance company or to a company with which you already have a history -- like your property insurer -- when you resume your coverage. You will need to prove you had prior insurance in order not to be rated as a new driver.

If you know there will be a lapse in your insurance, inform your insurance provider before you cancel your existing coverage, and ask for a letter outlining your policy number, insurance company, time insured, and claims history. It is also a good idea to prepare a letter in duplicate explaining why you are letting your coverage lapse. Have your insurance provider sign both copies, and leave one copy with him or her. That way, you will have proof of prior coverage when you need to reapply for insurance. If you have been driving outside the country, bring written proof of insurance from your previous country of residence.

If my car door is replaced following an accident, but the paint doesn't exactly match the other doors, shouldn't my insurance pay for repainting the whole car?

It's understandable that consumers would expect insurers to do this. It's bad enough having to suffer the inconvenience of doing without your car for several days, especially if you didn't even cause the accident, and naturally, you want your door to match the rest of the car, as it did before. However, your insurance won't pay to have your whole car repainted if only one door was damaged. Otherwise, you'd end up better off than you were before the accident, with a new paint job on an older car. This is known as "betterment."

You can insist on having your whole car repainted, but you will have to make up the difference in cost, or agree with the insurer on the amount of your contribution to the new paint job. Different companies have different policies in this regard, and often a decision is made on a case-by-case basis. Discuss it with your insurer and negotiate your contribution.

Insurance is intended to put things back to the way they were before, not to make them better than they were. If insurance companies were to pay for repainting an entire car to repair a scratch in one door, we would all pay higher premiums. It's up to insurance providers to explain this to consumers, and unfortunately, many of them fail to do so.

What changes are planned for automobile insurance in Ontario to help reduce rates?

Key initiatives announced in the Ontario government's recently released white paper "Automobile Insurance Affordability Plan for Ontario: Next Steps" are designed to contain the rising cost of lawsuits while improving access to needed benefits. The government is inviting public comment on these initiatives, which include:

• Amending the threshold at which an injured person can sue for pain and suffering to focus on severe physical, rather than mental or psychological, injuries.
• Expanding an injured person's right to sue for excess health care expenses.
• Eliminating the deductible for pain and suffering awards over $100,000.
• Providing protection for persons who may be sued as a result of an automobile accident, even though they were not present at the accident.

The white paper follows the government's announcement the previous week of new regulations aimed at addressing cost pressures, fraud, and abuse, such as: a new assessment and treatment program for whiplash and related minor injuries; restrictions on the use of medical examinations by insurers; prohibiting cash settlements for accident benefits until one year has passed, allowing injured people to continue to have access to treatment and income replacement; and a broadening of the definition of unfair or deceptive acts or practices to apply to health- care providers and paralegals in the auto insurance system, requiring claimants to sign treatment plans, and permitting insurers to request that a claimant be examined under oath where there is reasonable concern about accident circumstances.

The government has also directed the Superintendent of Financial Services to conduct reviews of: existing fee schedules used by various health-care providers treating accident victims; and rules used by insurers, to ensure that insurance companies are not unfairly denying coverage to consumers. In addition, the government has directed the Superintendent of Financial Services to require insurers to refile their rates, where appropriate, in light of the savings from this action plan.

If insurers do not respond "immediately and appropriately by passing on savings to consumers," says the paper, "the government will take action, including measures directly targeting auto insurance premiums, to ensure that auto insurance remains affordable and available for Ontarians. These measures could include rate caps, rate freezes, or rate roll-backs."

What happens if I get hit by a hit-and-run driver, or a car that isn't insured? Can I still claim for the damage to my car?

If your car is damaged by a hit-and-run driver who cannot be identified, you must claim for the damage under your Collision or All Perils coverage. If you do not carry this optional insurance, you will have to pay for any repairs yourself -- something to consider if you are thinking of dropping your Collision or All Perils coverage to save money on your premium.

In the case of an uninsured (but identified) driver, your Uninsured Automobile coverage, which is included with your basic automobile insurance, will kick in, but again, only if you carry optional Collision or All Perils insurance. Your claim is also subject to a mandatory deductible that applies even if you aren't at fault in the accident.

Note: Your Uninsured Automobile coverage will, however, pay for injury to you or your passengers caused by an uninsured or a hit-and-run driver, subject to a certain limit, regardless of whether you carry Collision/All Perils coverage.

What the heck is going on with car insurance rates? Why are they so high?

There are several reasons why automobile insurance rates have gone up so much in the last few years. The main reason, however, is the rising cost of claims, particularly for bodily injuries. According to data provided by the Insurance Bureau of Canada, in every province, growth in claims — particularly injury claims — has outpaced premium growth for several years. Whereas insurers could previously rely to a certain extent on investment income to offset losses sustained in underwriting, that is no longer possible with the deterioration in the financial markets, and so they have raised rates accordingly. Also, following the events of 9/11, global reinsurers (the companies who provide insurance to the insurance companies) were hit with billions of dollars in claims, driving up the cost of reinsurance. Finally, insurance fraud costs Canadian policyholders more than $1.3 billion each year -- about 10 per cent of total premiums paid, according to the Canadian Coalition Against Insurance Fraud.

In a heavily regulated industry such as car insurance, it will take legislative changes to stabilize rates. Fortunately, reforms are under way in New Brunswick and Ontario that will cut the cost of claims, primarily those resulting from minor soft-tissue injuries, without compromising treatment for accident victims. The four Atlantic premiers have also promised to adopt a common, harmonized plan to reduce costs and lower premiums.

Does the type of car I drive affect the cost of my insurance?

Yes. Although it does not usually affect the premium you pay for Third Party Liability insurance, it does affect the cost of coverage for physical damage to your car. Insurance companies rate vehicles according to their safety record and cost to repair or replace them. Collision, Comprehensive, and Direct Compensation insurance premiums vary according to these ratings.

The Canadian Loss Experience Automobile Rating (CLEAR) system rewards car owners with lower premiums for buying vehicles that experience fewer and smaller losses. For example, some vehicles may be more susceptible to theft than others; some may be better designed and less easily damaged; some are less expensive to repair; some protect their occupants better than others.

The CLEAR system was developed by the non-profit Vehicle Information Centre of Canada (VICC), which is sponsored by the automobile insurance industry. Checking before you buy could save you significant premium dollars. For more information, including ratings for specific models by year, visit the Web site at www.vicc.com.

Note: The type of car you drive is only one factor in determining the price of your insurance. Others include where you live, how far you drive, whether or not you drive your car to work or use it for business, your age, and, most importantly, your driving record.

If I have been driving for many years without a claim, but have an accident in which I am at fault, will my rates go up? How long does the accident stay on my record?

It's almost certain your premium will go up if you have an accident in which you were at fault, either completely or partially. Some insurance companies will "forgive" one at-fault accident if you are a long-term customer with an otherwise good record, but don't count on it, especially in today's tight market. Most likely, your insurer will lower your rating by at least one star, and possibly knock it all the way down to zero. Count on paying a minimum 15-20 per cent more as a result.

Your chances of being forgiven are much less if you are a new client, or if your insurer's prices are significantly lower than its competitors (the insurer maintains its price advantage by taking a hard line at claims time). That's why you should think twice before switching companies in order to save a few bucks on your premium -- it could cost you more in the long run. Ask what the new company's forgiveness policy is for an at-fault accident before you make your decision.

An at-fault accident stays on your driving record for as many years as it takes to requalify for the best driving level -- six years for six stars, even if you move to another province. If you apply for insurance with another company, you will be asked on the application if you have had any accidents in the last six years and, if so, whether you were found to be at fault in any way.

Is the insurance company allowed to replace parts in my car with used parts when repairing it after an accident?

Yes. The insurance policy says that the company has the right to repair, rebuild, or replace any damaged parts with other parts "of like kind and quality." That means that if you rear-end a car and damage the bumper on your four-year-old car, the insurer will likely replace your bumper with a used one of the same kind and quality as the original. If insurers were to replace old parts with new, our insurance premiums would be a lot higher.

Unlike your homeowners policy, which is usually sold on the basis of replacement cost (meaning that lost or damaged items are replaced at today's value), automobile repairs are made on an actual cash value basis. That means that depreciation is taken into account when your car is repaired.

If it is a safety-related issue, it's a different story. For example, a worn tire would be replaced with a new one. However, in that case, you would be expected to pay the difference between the new tire and the actual cash value of your existing tire.

If I buy a new car, is it automatically covered under my existing policy?

Your automobile policy provides automatic coverage for a newly acquired automobile, as long as your insurer is notified within 14 days of you taking delivery of the new car. However, for this coverage to apply, you must have all your vehicles insured with the same company.

CAUTION: If one vehicle has less coverage than another — for example, if one doesn't have Collision insurance — then the coverage on the new vehicle would be the same as the LOWEST coverage on any existing vehicles. In this example, it would mean there would be no Collision insurance on the new car — obviously not a good idea.

The best solution is to arrange with your insurance provider for coverage on your new car BEFORE you pick it up. Use the automatic coverage only as a safety net if you are unable to reach your insurance proivder before you take delivery of the car.

My husband and I each have our own car. My husband recently had an accident, and the insurance company said he was at fault. Now the company wants to increase MY insurance premiums because of HIS driving record. Why?

The insurance company can do this, and it will. Insurers assume that, even though the spouse does not normally drive the insured person's car, the opportunity is there for him/her to do so.

There is an endorsement that can be added to your policy to exclude a specific driver, like your husband, from using your car. However, before you go to this extreme, consider the consequences. If your husband had to drive your car in an emergency — even with your permission — and had an accident, the insurance would not pay for the damage.

I recently had a car accident. I was not charged by police, but now my insurance company is saying that I was at fault. How can it do this?

Insurance companies decide whether or not you are at fault based on regulations set out in the provincial Insurance Acts. These "fault determination rules" are not related to charges laid or not laid by police under the Highway Traffic Act or the Criminal Code of Canada. This means that, even though you were not charged by police for your accident, you can still be found at fault, either partially or completely, by the insurance company.

By the same token, you could be charged by police, but determined to be not at fault for insurance purposes. If you are not at fault, your premiums should not go up; if, on the other hand, you are judged to be at fault to any degree, your premiums will increase.

Fault determination rules cover more than 40 accident situations, using diagrams to illustrate specific accident scenarios. These rules are applied regardless of the circumstances of the accident -- road or weather conditions, visibility, point of impact on the vehicles, or the actions of pedestrians, much to the chagrin of many consumers who believe there should be some leeway for poor conditions or other circumstances that they feel are beyond their control.

Is the insurance company allowed to cancel my car insurance, even though I legally must have car insurance?

Yes, it is, generally for two main reasons:

• Non-payment of premiums: Your insurance premium is due as soon as you receive the bill. If you don't pay it, your insurer will cancel your coverage, plain and simple. So don't let your payment go into arrears! If you can't pay the premium as promised, contact your insurance provider before the account is considered delinquent, and a solution may be reached. If your payment is automatically deducted from your bank account, make sure you always have enough money in the account to cover it.
  
  Another important point: If you have decided to switch insurers at renewal time, don't think that simply ignoring your renewal notice will terminate your agreement with your previous insurer. You must notify the insurer in writing of your intention not to renew; otherwise, you are still committed to that insurance and on the hook for the payment.
• Inaccuracies or omissions in your application, intentional or not: The insurer could also cancel your insurance if you didn't report a change in the risk — for example, if you start using your car to deliver pizza, while your insurer thinks it is being driven for pleasure only.

Having your insurance cancelled is inconvenient enough, but it gets worse. The cancellation will appear as a black mark on your insurance record that will follow you as you scramble to find coverage elsewhere — at an inflated premium, thanks to your now-blemished record.

Note: There is a difference between cancellation and non-renewal. Cancellation of your insurance could take place at any time during the coverage period, usually for the reasons listed above; non-renewal means the insurer chooses not to renew your coverage at the end of its term. This could be for a number of reasons, but most likely because you have had too many claims and the insurer considers you a poor risk. In this case, you'll almost always end up paying considerably more to the new insurer because you were "non-renewed" by your previous insurance company.

My husband and I own three cars. My son is only an occasional driver, but the insurance company wants to rate him as a full driver and charge a much higher premium, even though the cars are registered in my husband's and my name. Is this allowed?

Yes, it is allowed, and is common practice among insurers. And while it may seem like a money grab, there is some logic behind the practice. The thinking goes that, if there are three cars and three drivers, each driver must be rated as a principal driver. Since your son, in theory at least, has access to a car at all times, he cannot be rated as an occasional driver. Even though you may control your son's access to the car, if insurance companies did not take this position, sons and daughters everywhere would register their cars in the name of their parents and then claim to be occasional drivers. They'd save money on their insurance, but everyone else would have to pay more to subsidize their higher accident rate.

If you are a long-term client with a good claims record, you may be able to convince your insurer to reconsider its position, but don't count on it.

We are planning a trip with our car through the U.S. and into Mexico. Do we need special insurance to drive in those countries?

Your insurance in Canada covers you for driving anywhere in the United States (including Hawaii and Alaska), but not in Mexico. If you are planning to drive in Mexico, you will need to buy insurance coverage from a licensed Mexican insurance company. Check with your insurance provider or travel agent before you go.

It's also a good idea to ask your insurance representative what the claims procedure would be if you were to have an accident while driving in the U.S. Also make sure that your insurance doesn't expire while you're away, and that you're carrying enough liability insurance. Remember, any lawsuits filed against you there would be payable in U.S. dollars, and payouts for personal injury lawsuits can be hefty in some states.

My daughter will be moving to the U.S. temporarily to attend college. She will be driving her own car there. Can she keep her Canadian insurance policy, or does she need to purchase insurance in the U.S.?

As long as she still has a permanent residence in Canada and is just away to attend school, she can continue to use her Canadian insurance policy. There is no time limit, and it is not necessary to obtain a driver's license in the U.S. either.

However, some insurance providers are now insisting that policyholders advise them if they are going to be living in a different geographical area, even on a temporary basis. The insurance company will then alter the premium to reflect the increased (or decreased) risk of the insured driving in that area. Therefore, to be on the safe side, your daughter should inform her insurance representative before she leaves. Unfortunately, she may end up paying a higher premium as a result.

If I lend my car to a friend, and he has an accident, does his insurance cover it?

No! If you lend your car, you also lend your insurance. If your friend — or anyone else, for that matter, like a parking valet — has an at-fault accident while driving your car with your permission, it will go on your insurance record and you'll take the hit on your premium. Insurance does not follow the driver; it goes with the car.

However, there is a solution to this problem -- the "27 endorsement," which covers damage to a car that you are driving but don't own. It's fairly inexpensive to add to your automobile policy. It comes into play only if the policyholder is legally liable for the damage; otherwise, the other party's insurer pays.

The 27 endorsement can also be used for insuring rental cars, an economical alternative to purchasing the rental agency's collision damage waiver. Ask your insurance representative about this option.