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Will a licence suspension hurt my premiums?

By SmartCoverage Team on April 12th, 2018

Your driver’s licence has been suspended and you’re worried your auto insurance premiums are going to go through the roof. Any stain on your driving record may be grounds for rates to rise, but whether or not they will depends entirely on your insurance provider and circumstances of your suspension.

Did a conviction accompany your licence suspension?

The Ministry of Transportation can suspend your licence for a number of reasons. Medical concerns, accumulated demerit points and failing to insure your vehicle can all be grounds for having your licence temporarily revoked.

Police officers can also enact an immediate 90-day Administrative Driver’s Licence Suspension for alcohol-related infractions; though, this suspension is sometimes just a warning and doesn’t always come with a criminal conviction.

In Ontario, insurance providers are prohibited from raising rates for cases in which there are no criminal convictions and the licence suspension lasts less than a year. This is not the case in B.C., Saskatchewan, and Manitoba, where provincial insurance has standardized rate increases for any and all suspensions.

For licence suspensions accompanying criminal convictions, you’re almost guaranteed a rate increase. Depending on the gravity of your criminal conviction, insurers can go so far as to void your policy completely.

Does your insurance company have grounds to check your driver’s abstract?

If your suspension is longer than a year or is accompanied by criminal convictions, you may not see rate increases immediately. Though any and all licence suspensions are visible to your insurance company on your Driver’s Abstract, insurance companies aren’t alerted directly when your driver status changes.

Most insurers will only look at your Driver’s Abstract if you’re a new client, they’re tipped off about a change in your status, or they’re investigating another driver listed on your policy. In practical terms, this means you’re unlikely to experience a rate hike unless you’re shopping for new auto insurance.

Of course, many insurance policies require policyholders to report incidents or changes in status directly. It’s best to read the fine print of your policy to determine whether or not you’re required to report your suspension.

Failing to report a suspension can be grounds for insurers to void your policy; so clarify with your insurance provider if you’re unsure as to whether you are required to inform them of your suspension.

What can you do to encourage better rates?

If your insurance company is alerted to your licence suspension and chooses to raise your rates, you may consider shopping around for a new auto insurance provider. Every insurance company has its own procedure for assessing risk, so the impact of a licence suspension on rates will vary from insurer to insurer.

There’s no better remedy to a sullied driving record than time spent without an infraction, but some insurance providers also provide discounts to those willing to take defensive driving classes. Some insurance companies prefer classes from specific companies, so check with your broker before signing up for a class.

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