Ontario has some of the strictest driving regulations in Canada. You may be wondering if temporary car insurance is even available in Ontario. Currently, Ontario insurance companies do not offer temporary car insurance. However, more and more, drivers are on the lookout for customized solutions to meet their specific driving needs.
The concept of car ownership is rapidly changing. Carpooling apps, like Uber and Lyft, offer drivers the value of convenience. And with promises of fully automated vehicles on the horizon, you may be re-evaluating how you view ownership. Some experts suggest that Canadians’ relationship to vehicle travel might be shifting to a more functional-based one. This means reserving car usage for everyday trips to work, running errands, and so on. With that in mind, you may be looking into temporary car insurance plans or ‘pay-per-use’ options. Below, we go over the specifics of temporary car insurance and why Ontario is not yet offering it.
What is temporary car insurance?
If you’re someone who needs insurance less than the standard one-year length policy, temporary car insurance is for you. These temporary policies can last for days, weeks, or even a few months. Short-term plans are alternatives to traditional and extended–12 months or more–insurance policies. While providing you comprehensive coverage on a ‘pay-per-use’ basis, it fills a critical gap in today’s sharing economy. These plans offer the flexibility and control that your driving habits require. Across the board, car insurance companies are introducing new temporary insurance models to adjust and compete in the emerging sharing economy to better meet shifting consumer needs.
When would you need it?
Not all of us have the same driving habits. Short-term car insurance will make more sense for you if:
- You buy a used car.
- You visit Canada and only stay for a few weeks or months.
- You’re transferring car ownership and the current license plate being used is short-term.
- Your vehicle is a seasonable hobby. This would include vintage cars or motorcycles only driven a few months out of the year.
- You are a student at home for the summer holidays. This means you will want to purchase temporary car insurance for those four months.
- Buying a travel trailer, like an RV, to take on road trips during vacation.
To learn more about registering and insuring a car in Ontario, visit the following Government of Ontario links:
Temporary Car insurance is not available in Ontario
Temporary car insurance is offered in most Canadian provinces, except Ontario. The reason is that we have one of the most strict insurance regulations in the country. Therefore, Ontario insurance companies are not allowed to offer temporary car insurance coverage. While you will be unable to find temporary car insurance in Ontario, certain insurance companies will offer six-month policies. However, this is rare. Much like a standard insurance policy, you should have isure shop around and compare rates for you. So, if you don’t need a full year’s worth of insurance coverage, here are some options to get short-term car insurance in Ontario:
Cancel your policy early (not advised)
If you are looking for temporary car insurance in Ontario, your options are limited. It’s well known across the board by insurance and legal experts that Ontario has historically been tightly regulated by the Financial Services Commission of Ontario (FSCO) when it comes to controlling Ontario car insurance for drivers. Moreover, most insurance providers across Canada will not offer insurance plans outside of six-month packages as a baseline. While some Ontario insurance providers offer six-month coverage, they are few and far between. In theory, you can opt for a 12-month policy and then cancel it before the end of the agreement, but the cancellation fees are costly.
FYI: If you’re thinking about getting temporary car insurance, never let your policy lapse. This applies even for temporary insurance. Doing this can be considered high-risk by insurers, and may make it harder for you to get regular insurance when you need it.
Special permit
If you need a short-term insurance policy in Ontario, you can purchase a Temporary Vehicle Registration or special permit. It provides coverage for your vehicle that is not registered in Ontario. You can use a special permit to drive a vehicle in Ontario for 10 days. It starts from the date of issue. You can only apply for two special permits in 12 months (for passenger vehicles). This means you can temporarily drive or transport a passenger vehicle through Ontario without registering it in the province. These permits can be bought if you are importing a vehicle from outside the province. Additionally, this applies if you are a new resident of Ontario and recently bought a vehicle. You have 30 days to register the vehicle in the province.
Here’s more information on special permits.
MyPace: Pay-as-you-go insurance
Last year, the Canadian Automobile Association (CAA) introduced a ‘pay-as-you-go’ plan called MyPace. While you still need car insurance to use this app, it can help you lower your premiums. This is for drivers that drive fewer than 9,000 kilometres per year. The MyPace program uses a device that tracks your mileage. It then adjusts your premium rate according to the distance you drive – or how many times you have driven. The distinction between this program and other driving behaviour monitoring programs (Telematics) is that the MyPace program is only based on your mileage driven. It offers ‘pay-as-you-go’ use, regardless of your driving style. In addition, it offers you savings simply because you choose to drive less. As of now, CAA MyPace is the only model in Ontario that offers a ‘pay-as-you-go’ plan which is approved by the auto insurance regulator, FSCO.
Short term policy
Temporary insurance is available in most Canadian provinces, but not in Ontario.
You can check with the Facility Association to see which companies offer it. In theory, you could opt for a 12-month policy and then cancel it before the end of the agreement, but the cancellation fees are costly. If you are a driver looking to get a short-term coverage solution, you may be able to get car insurance for a six-month term. However, your insurer may not offer this.
Storing Your Summer Vehicle
If you store your vehicle for most of the year, you also have another option. You can pay for an annual policy but remove road, liability, and accident coverage during the time your vehicle is in storage. You only need to keep comprehensive insurance while your car hibernates. Comprehensive insurance is the portion of your policy that offers coverage against fire, storm damage, or theft. Once you decide to use that car on the road, then you’ll need to make some changes. Additionally, you may have to renew the license plate and start road insurance at least two to three weeks before driving. This will give your insurer some time to update your details with the Insurance Bureau of Canada.
Student drivers
If your young driver is away at school, they may not need year-round coverage. While they are home for the summer and need insurance, you can add them to your policy as an occasional driver. This saves you the hassle of trying to get them temporary insurance. In addition, you won’t risk having to pay hefty cancellation fees should your teen need to be taken off the policy sooner than expected. But, if the vehicle is registered in your teen’s name, they will need their own policy.
Rental car insurance
If you’re already a car owner with an existing car insurance policy, you probably don’t need to purchase additional temporary insurance for your rental. Likely, you will already have coverage. The surprising truth is that in many (if not most) cases, you likely already have rental car insurance through one or more of these options:
- Your car insurance
- Complimentary coverage that comes with your credit card
- Coverage included with your travel insurance
Final thoughts on temporary car insurance
Unfortunately, if you’re an Ontario driver, customizable short-term insurance plans aren’t yet available. However, some auto insurance providers appear to be shifting their focus towards more innovative programs. Pay-as-you-go billing is one example of the emerging shift in the consumer model of car sharing and functional vehicle use. This is a significant first step and perhaps will help to open the window to invite new plans that can suit your driving style and value for your money.
