My husband recently traded in his vehicle for a new one. Two weeks later, he was in a collision that wasn’t his fault. The problem is he forgot to transfer his insurance policy from the old vehicle to the new one. When he called his insurance company to explain the situation, they said he wasn’t covered. His policy is still active on the old vehicle, so shouldn’t he still have some sort of coverage from that? Can he file a third-party claim directly with the at-fault driver’s insurance company? – Lora, Bedford, N.S.
When it comes to your insurance, out with the old and in with the new may include a little leeway.
“Most [car insurance] policies across the country give you coverage for 14 days for a newly acquired automobile,” said Anne Marie Thomas, director of consumer and industry relations with the Insurance Bureau of Canada, “If you trade in an old car and get a new car, it will have the same coverage – but only for 14 days.”
That’s for provinces with privately run insurance. If you wait longer than the grace period to let your insurance company know – or if your policy doesn’t have a grace period – then you’re not covered if you get in a crash.
That means you’re on your own to pay for your repairs – even if you’re not at fault, Thomas said.
British Columbia, Saskatchewan and Manitoba, the three provinces with government-run insurance, have shorter grace periods – 10 days in B.C. and seven days in Saskatchewan and Manitoba.
In those provinces, that grace period only applies if you don’t have your old car anymore.
No right to sue?
In most of Canada, you can’t sue the at-fault driver or their insurance company to pay for your repairs.
Alberta, Ontario, Newfoundland and Labrador, New Brunswick, Nova Scotia, Prince Edward Island and Quebec all have no-fault insurance, also known as direct compensation for property damage.
The three provinces with government-run insurance, also follow a no-fault model for repairs, IBC said.
With no-fault insurance, if somebody hits you, your insurance company fixes your car and their insurance company fixes theirs.
if you weren’t at fault, your rates wouldn’t go up, even though your insurance company paid for your car’s damage.
The driver who hit you would still be considered to be at-fault and their insurance rates would go up.
Before no-fault insurance, most provinces had a tort system, where your insurance company would have to go after the at-fault driver’s insurance company.
But now, in most provinces with no-fault, there’s no suing for repairs.
“One of the mandates of direct compensation is that everybody has to be insured,” Thomas said. “There’s no need to sue each other.”
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If you don’t have insurance and you’re at fault, the other driver’s insurance company could sue you – but often they won’t, Thomas said.
“Depending on the claim, it might cost the insurance company more than they get back,” Thomas said, “But each situation is different.”
Ensure you have insurance
Even if your insurance company gives you a grace period before you switch your policy to a new car, the police might not.
It’s illegal to drive without insurance in all provinces. In Nova Scotia, for instance, the fine starts at $2,000.
“Once you have a conviction for driving without insurance, you’re considered high risk,” Thomas said. That could mean you end up paying as much for insurance as an impaired driver.
In every province, you’ll have to register your new car – and to do that, you need valid insurance.
In Nova Scotia, dealers don’t have to make sure you have valid registration or insurance before leaving the lot.
“It is not the dealer’s obligation to confirm proof of insurance, but rather, the owner’s obligation when obtaining a vehicle permit from the province of Nova Scotia,” said John Sutherland, executive vice president of the Nova Scotia Automobile Dealers Association.
Some provinces, including B.C., Alberta and Nova Scotia, allow you to switch your plates from your old car to your new car. But you’ll have to register the new car eventually.
How long you can wait varies by province, In Nova Scotia, for instance, you have 30 days to register.
Some other provinces, including Ontario and Quebec, don’t let you put your old plates on your new car until after it’s registered and insured.
Have a driving question? Send it to firstname.lastname@example.org and put ‘Driving Concerns’ in your subject line. Emails without the correct subject line may not be answered. Canada’s a big place, so let us know where you are so we can find the answer for your city and province.