In today’s digital-first world, comparing car insurance rates and switching providers is easier than ever. Many Ontarians realise loyalty doesn’t always pay off, especially if premiums keep rising or customer service is lacking. However, the biggest question for Ontario drivers before changing is: Will switching insurance companies affect my insurance rate? The answer depends on a few factors. In most cases, changing insurers won’t hurt your rate and can lower it if you have a clean driving record and time your switch properly. However, switching too frequently or doing so after an at-fault accident can sometimes cost you more in the long run.
In this guide, we’ll break down how switching insurance companies in Ontario really works, including when it’s worth it, what to avoid, and how to make the transition as smooth as possible.
Can You Switch Car Insurance Companies in Ontario?
Yes, you can switch car insurance companies in Ontario at any time. The province operates under a private auto insurance system, regulated by the Financial Services Regulatory Authority of Ontario (FSRA). This means drivers are free to shop around and change providers whenever it suits them, whether it’s to save money, find better coverage, or improve customer service.
Is It Common to Switch Car Insurance Providers?
Absolutely. In today’s competitive market, loyalty to one insurer is becoming less common. Many Ontarians are now switching insurance companies every five years, or even more frequently, especially when potential savings exceed 10%. With rates fluctuating and discounts varying by provider, it makes financial sense to explore your options regularly.
How to Cancel Your Current Insurance Policy
Switching your car insurance insurer is a straightforward process, especially when guided by an isure broker. Here’s how it works:
- Find a New Provider: Shop around and compare quotes to find the best fit for your coverage needs and budget.
- Contact Your isure Broker: Once you’ve chosen a new provider, your isure broker will help you cancel your current policy.
- Sign a Lost Policy Voucher (LPV): This is a document that officially cancels your policy. Alternatively, you can sign the back of your existing policy document and return it.
- Confirm Cancellation: Always double-check that your old policy has been cancelled. Never let it lapse due to non-payment, as this can negatively impact your credit and insurance history.
Pro Tip: Your new insurance company cannot cancel your old policy for you—it’s your responsibility.
When is the Best Time to Switch Insurance Providers?
Timing is important when switching insurers in Ontario. Here are ideal scenarios for making the change:
- During Policy Renewal: This is the most seamless time to switch, as there are typically no cancellation fees.
- When Life Changes: Moving, buying a new car, getting married, or adding a new driver are all good opportunities to re-evaluate your insurance needs.
Did you know? A change in postal code can significantly affect your home insurance rates, as insurers assess neighbourhood risk based on local claims history, such as the type, the number and the cost of each claim.
For more information on the best time to switch insurance companies, read our blog for everything you need to know.
When Not to Switch Insurance Companies
Switching isn’t always the best move. Consider holding off if:
- You’ve recently renewed your policy and would face early cancellation fees.
- You’ve been found at-fault in a recent accident or received a driving violation.
- You currently have an open claim (though your current insurer will still handle and pay it out).
If any of the above apply, it’s best to wait until your record stabilizes or your claim is resolved before switching providers.
Can You Switch Insurance Companies Multiple Times?
Yes, there’s no legal limit to how often you can switch providers in Ontario. However, switching too frequently may:
- Lead to cancellation fees.
- Disqualify you from loyalty-based discounts.
- Make it harder to access benefits like accident forgiveness or claims-free discounts.
Speak with an isure broker to assess whether the savings outweigh the potential disadvantages.
So, Will Switching Insurers Affect My Car Insurance Rate?
Switching insurers doesn’t automatically increase your rates. In fact, shopping around is often the best way to reduce your premium. As long as your driving record is clean and you’re not mid-claim, your rate should remain stable—or drop.
What matters most is how your risk profile (driving history, age, vehicle type, location) fits into each insurer’s unique rating model.
Will I Still Qualify for Accident Forgiveness?
Not typically. If your current insurer offers accident forgiveness, switching may cause you to lose this benefit—at least temporarily. Most companies require three or more years of continuous coverage before offering it again.
Since accident forgiveness can save you thousands after an at-fault collision, weigh this loss carefully before making the move.
Should I Bundle My Home and Auto Insurance?
Yes! Bundling your policies with one provider can unlock significant savings. If you’re already reviewing auto insurance rates, check whether the same insurer offers home insurance as well. You may be eligible for:
- Multi-policy discounts
- Improved claims service
- Easier management of renewals and payments
Understanding Cancellation Fees and Penalties
Car insurance is typically sold as an annual contract. Cancelling before the end of your term may result in penalties, depending on the insurer and timing of the cancellation.
There are two primary cancellation models:
- Pro-Rated: You get a full refund for the unused portion of your premium.
- Short-Rated: A small portion of your refund is withheld as a penalty (usually around three weeks’ worth of premiums).
For example, if your annual premium is $2,000 and you cancel halfway through, a short-rate penalty might cost you approximately $100. Why the fee? Short-rate cancellations cover the administrative costs of setting up your policy.
Do I Need a New Insurer If I Get a New Car?
No, getting a new car doesn’t require changing insurers. Your current provider can simply update your policy to reflect your new vehicle. This includes adjustments for make, model, safety features, and usage.
Just contact your isure broker with the new vehicle information, and they’ll handle the rest.
Can I Switch Insurers If I Have an Open Claim?
Yes, you can switch insurance companies even if you have an open claim. However, keep these things in mind:
- Your current insurer is responsible for settling the claim.
- If you’re found at-fault, your future premiums may rise.
- You may need to communicate with both insurers until the claim is resolved.
While it’s not a dealbreaker, be prepared for a bit more legwork during the transition.
Final Thoughts: Is Switching Insurance Companies Worth It?
Switching car insurance companies in Ontario can save you money and give you access to better service—but only if you do it the right way. Make sure you:
- Compare quotes carefully
- Understand cancellation fees
- Evaluate any lost perks like accident forgiveness
- Consult with a trusted broker
At isure, we make switching insurance easy and stress-free. Our expert brokers can help you explore options, avoid penalties, and find coverage that fits your lifestyle and budget.
Need help switching car insurance in Ontario?
Contact an isure broker today to switch insurers successfully, or get a personalized quote to start saving today!
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