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Is this person uninsurable or just not trying hard enough?
June 1, 2010 8:34 PM   Subscribe

Is this person uninsurable or just not trying hard enough?

A friend recently said to me that she was uninsurable with respect to auto insurance. In other words, she thinks that she would never be able to get an insurance policy under her own name where she is listed as the primary driver. She is currently driving as a secondary driver on someone else's insurance.

Until just recently, her claims history consisted of two accidents: one at fault collision in 2005 and another not at fault collision in 2007. I could believe her rates might be high, but I find it hard to believe that this history would make someone uninsurable. I don't think she has any convictions for traffic offences. We live in Ontario. How likely is it that she is truly uninsurable?

Follow-up ... she was in an at fault collision yesterday. If she wasn't uninsurable before, is a third accident likely to change things?
posted by pantheON to Travel & Transportation (13 answers total) 1 user marked this as a favorite
before yesterday, I'd say she shouldn't even be paying incredibly high rates. Yesterday makes it a bad day to shop for auto insurance, but she should still be insurable.

Canadian insurance may work a little differently than US insurance, but I can't believe the odds on having an accident are that different.

In the US, they usually look the hardest at the past 3 year's history. If she got a quote and didn't bring up the 2005 at-fault, it's even odds as to whether they'd even spot it.

I'm also perplexed at why being on someone else's policy should make a big diff. They rate everyone on a policy, and if there's a big risk in the mix the premiums go up, period. If she is claiming NOT to be primary driver on a vehicle where she actually IS, that is a material misstatement that the insurance company would be unhappy with, although proving it might be difficult.

I think there's more to this story...
posted by randomkeystrike at 8:43 PM on June 1, 2010

Doesn't it depend on how bad the accidents were as well?
posted by IndigoRain at 8:52 PM on June 1, 2010

The accidents were apparently fairly minor ... damages in the $4000 to $6000 range each.
posted by pantheON at 8:55 PM on June 1, 2010

Very few people are uninsurable. A horrid driving record might make it unaffordable, but if you have the cash, generally, someone will insure you. One at-fault collision and another not-at-fault in five years doesn't seem like the sort of record that would make the premiums extraordinarily expensive.
posted by sanko at 8:59 PM on June 1, 2010

I take it that your side of the border does not have "no fault" insurance? On this side (Michigan) there is no such thing as uninsurable. There is a high risk pool that is two to five times as high as most folks pay depending on how bad "bad" is. Although our politicians have a hard time understanding that if you mandate health insurance, then it will be relatively affordable even for people with high risk, they bought into that concept wholeheartedly around 30 years ago.

I'm trying to remember what it was like when we lived in non-no-fault areas, but even there it seems to me that if you have a valid drivers license, and you drive, and you have a vehicle, you have to have it insured or post a bond, and therefore, my guess is that it is the prohibitive cost of same that your friend is referring to. One of my sons was nearly as bad of a driver as I had been, and for a while, we had to exclude him from our policy or our policy would increase fourfold.
posted by beelzbubba at 9:09 PM on June 1, 2010

In the US a lot of insurance and "insurability" is based on credit rating in addition to accident history. Speaking as a person who at one time (in a three year period) had three at-fault accidents, two ran stop-signs, three speeding tickets and a failure to yield ticket(*) and still had car insurance, your friend should be okay - she just needs to shop around and possibly find an insurance broker to point her in the correct direction.

*Note: My driving record has improved dramatically.
posted by banannafish at 9:12 PM on June 1, 2010

Yes, an at-fault accident can change things. Cops can be aggressive at ticketing on accidents and those tickets can really screw you. However, at that point you are not uninsurable. You are just out of the general insurance pool.

It is pretty easy to be high risk. When I was in Ontario, I got into an at-fault accident where I spun out on a patch of black ice and hit a fire hydrant, did $6k damage to my car and maybe $1k other property damage, no injuries. The cops cited me for dangerous driving, even though I was driving at city speeds (just not slow enough for road conditions). Had I not pled this charge down, I would have been thrown out of the general insurance pool. I hired a paralegal and got the charge down to "failure to drive in a marked lane". My insurance company doubled my rates, but I shopped around at renewal time and got a policy that was not much more expensive than my pre-accident rates. That $300 I spent on the paralegal was some of the best money I have ever spent, kept me in the general insurance pool by the skin of my teeth.
posted by crazycanuck at 9:16 PM on June 1, 2010

It could have to do with her credit score or the Canadian equivalent. In the US people with particularly bad credit can have an impossible time getting car insurance.

On preview: What banannafish said.
posted by stoneweaver at 9:16 PM on June 1, 2010

There really could be a lot of different things going on here. She could be using uninsurable as shorthand for saying that the premiums are too high for her current financial situation to justify owning a car. Perhaps her current insurer wants to drop her but she hasn't really shopped around yet and is assuming that no one else will cover her. Or she might have something really horrendous on her record that she'd rather not openly discuss, like a DUI that resulted in serious injury or death.
posted by Rhomboid at 9:36 PM on June 1, 2010 [1 favorite]

Facility Association. All drivers in Ontario can be insured. At a high price of course.
posted by saucysault at 2:19 AM on June 2, 2010

saucysault nails it. This is what the residual insurance market is for: making insurance available for those who have been rejected by the voluntary market.

Policies obtained through some residual mechanism are unlikely to be cheap, but they're always available. This is a political response to a problem created by making certain forms of insurance mandatory: unless you want to drive up rates for everyone by requiring insurers to accept obviously bad risks (which is actually what some states have decided to do), you need some place for those people to go.

There are a couple of ways of doing this. Some states set up what amounts to their own insurance company for people who can't get insurance on the open market. This is supported by taxes, usually levied on insurance companies but also supported from the treasury. Others have an assigned risk pool, where insurers are required to write coverage for a certain percentage of bad drivers based on their market penetration (e.g. if you write 10% of the business in a state, you carry 10% of the pool). The Facility Association is apparently Ontario's residual market solution.

Also, three accidents, even at fault accidents, isn't going to make you uninsurable. Your policy ain't gonna be cheap, but until you've gotten your license suspended/revoked or pulled a DOI/DWI or two, most companies won't outright reject you. She should take a better look at the voluntary market before she assumes she's uninsurable. There are carriers that cater to marginal drivers like her.
posted by valkyryn at 5:06 AM on June 2, 2010

"In the US a lot of insurance and "insurability" is based on credit rating in addition to accident history. "

If she actually IS having trouble getting insurance at all, and not just complaining about the price, this might be it. Insurance companies prefer their customers be able to pay.
posted by gjc at 5:41 AM on June 2, 2010

What about her non-claim history? How's her driving record with regards to speeding tickets, impaired driving, etc? Was she impaired during either of her at-fault collisions?
posted by jacquilynne at 7:30 AM on June 2, 2010

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