A.P. Reid's Tips and FAQs:
What is the Facility Association?
Q. Why would I have difficulty obtaining auto insurance?
A. There are many reasons. For example, you may have difficulty getting insurance because of your driving record or accident history. Other factors could include where you drive, the type of vehicle you drive, or how the vehicle is used.
Q. How does Facility Association operate?
A. All licensed insurance representatives have access to Facility Association, so there is no difference in the way customers purchase auto insurance through Facility Association. Facility Association itself is not an insurance company and does not issue policies. Policies obtained through Facility Association are issued by designated companies which also handle claims and all other administration in connection with such policies.
Q. Why are auto insurance rates through Facility Association higher?
A. Vehicle owners who need to obtain insurance through the Facility Association are typically considered to be “high risk”. Only a very small percentage of the drivers in any province or territory are insured through Facility Association. This combination of high risk and small numbers lead to higher premiums for these policies.
Q. How long do motor vehicle conviction and accident surcharges stay on my record?
A. Motor vehicle conviction surcharges stay on your record for three years. Accidents will affect your driving record for up to six years; however, your driving record may get better with each year without accidents.
Q. Why is it important for me to know about Facility Association?
A. As we’ve already noted, only a very small percentage of drivers in any province or territory are insured through the Facility Association. If Facility Association loses money, it can assess all auto insurance companies in a province or territory where the loss occurred for funds. This cost ultimately will be reflected in higher insurance premiums for all drivers in that jurisdiction. Conversely, if Facility Association generates a surplus, those funds can be distributed to all automobile insurance companies, helping them to control costs.
Q. How can I avoid being placed on Facility Association?
A. You can:
1. Drive carefully.
If you are insured through Facility Association because of your driving record or accident history, then each year that you have no convictions or accidents will help you achieve a better rate. If you have no motor vehicle convictions for three or more years and no accidents for five or more years, together with a good payment history, you should no longer be a Facility Association risk and should shop around for your automobile insurance.
2. Pay your premium on time.
If you have a history of not paying your premium, you will have difficulty obtaining insurance; you may have to pay higher premiums with a policy obtained through Facility Association.