Thinking about driving without insurance? It’s illegal, and you’ll pay fines and penalties. But, there are times when lines blur. Can you cancel your insurance if you sell your car? Or can you keep a car without insurance? Can you cancel insurance to save money now, and renew later, without penalty? Yes to all, but you have to do it right to avoid penalties. Let’s dig in.
Don’t let your car insurance lapse
A lapse in your insurance means you went without insurance for a time, the reason though is important.
Common reasons for a lapsed car insurance policy include when you sell your car, your car breaking down, or after an accident. Bad reasons include not having money to pay your bill, or simply, “I forgot to pay my insurance bill.”
Insurers don’t like to see gaps in auto insurance coverage, especially when money is the cause. For one, It could imply you may be driving without insurance, therefore labelling you as a high-risk driver, which could double your premiums.
- Paying significant fines for getting caught driving without insurance
- If you’re at fault in a car accident
- Driver’s license suspension
Instead of letting it lapse, you can put your car insurance on hold. You can speak with your provider on how to get cheap car insurance or shop for auto insurance quotes to find a better rate. But if you still want to cancel your insurance, there are rules to follow to prevent higher rates upon your return.
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Getting the cheapest auto insurance for a lapse in coverage
Don’t let it lapse, instead carry insurance until you buy a new car or fix your old car. Many good reasons exist, however, such as selling your car, using healthier modes of transportation, or not being able to afford the costs of owning a car anymore. But, it won’t exempt you from higher rates in the future.
You can avoid the high-risk driver designation, but when you return, your loyalty discount goes away. Also, in general, car insurance quotes rise every year from cost increases to the insurer following the volume and frequency of claims. So, your new rate will be higher.
It doesn’t mean you can’t leave, or shouldn’t. You can save yourself some headaches with a few simple steps.
- Before leaving your provider, get a proof of insurance coverage letter or driving experience letter. It’ll help explain the gap to your new provider.
- You can ask for reinstatement from your old provider, not just a new quote, though there may be late fees or possible policy surcharges. Beware, they may ask you to pay in one lump sum. In other words, you’re paying 6 or 12 months all at once instead of one month at a time, so prepare to pay in full.
- If you have tenants or home insurance with the provider, keep it active. Tenant insurance is inexpensive, and if you have a mortgage, your lender requires you to have house insurance.
- Finally, treat it as a one-time event. While your insurance broker or agent may brush it off, repeated occurrences of reinstatements are unfavourable with your insurer.
Fines for driving without insurance
|First offence||Second offence|
|Ontario||$5,000-$25,000||$10,000 – $50,000|
|BC||$598||$2,300 (if you lose in court)|
|Alberta||$2,875-$10,000||$5,000 – $20,000|
|Saskatchewan||$580||7-day vehicle seizure|
|Prince Edward Island||$600-$2,000|
Driving without insurance in Ontario
Fines start at $5,000, but it doesn’t stop there. Ontario car insurance regulator, FSRAO, will also add a 25% surcharge to your fine. Your license is suspended for a minimum of 30 days, but you could face a driver’s license suspension for a year. Finally, your car may be impounded for 3 months. It’s not a criminal offence, and you don’t receive demerit points.
Driving without insurance in Alberta
The penalty for driving without insurance in Alberta starts with fines at $2,875, but failure to pay can land you in jail for up to 6 months. It’s not a criminal offence, but you do risk losing your license if it ends up in court.
Is driving without insurance a criminal offence in Canada?
No, it’s not a criminal offence, but as you can see, fines and penalties vary by province. In the Atlantic region, for instance, provinces can suspend and impound your vehicle, face jail time, and have your license suspended. Failure to show proof of insurance, even if you have it, may incur other fines and penalties, though, a lesser charge.
Can you keep a car without insurance?
Yes, but be aware of your risks. While you probably won’t require collision insurance, it’s smart to keep comprehensive insurance on your vehicle to protect it from vandalism, falling trees, and other risks associated with a parked car.
Driving without a license
In Ontario, you’ll face fines of $200 to $1,000. Driving without a license in Alberta is a $2,000 fine, and you could also face jail time of 14 days to 6 months. In BC, it’s a $500 charge and up to 6 months in jail for a first offence. So, while driving without insurance is a significant risk, so is driving without a license.
So, don’t drive without a license, either.
The bottom line
Driving without insurance is not a risk worth taking. We already laid out the fines and penalties. If you get into an accident without insurance, you’ll be held responsible for paying for the repairs to your car, the cost of any medical bills. If you’re found at fault, you’ll also be liable for any resulting charges. The charges could be the person’s vehicle, their medical expenses, but also replacing their income if they’re unable to return to work. Finally, trying to get insurance afterwards, and, well, let’s just say, you won’t be getting any cheap car insurance quotes.
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