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Last summer, my 21-year-old son bumped his mother’s car into the back of another car in a local parking lot. I had official forgiveness of a first claim, so had the other car’s owner put it through his insurance. But my insurance company just cancelled my policy – they requested updated information and say they didn’t receive it in time – and now I have to change companies. It should have cost around $3,000 for me, my wife and our two sons to drive our two cars. But because my son is now considered an at-fault driver, the cheapest rate I can find is $6,000. – Mark, Toronto

Your insurance company might forgive your first accident, but other insurance companies won’t forget it.

“Nobody will transfer accident forgiveness,” said Adam Mitchell, a Whitby, Ont, insurance broker. “Every company will ask how long you’ve achieved accident-free driving.”

If you switch to a new insurance company, it will either look you up on a database that shows claims history or ask you to get a letter of experience from your previous insurance company.

And if you have any at-fault claims, your new insurance company can use them to set your new rates.

“[Accident forgiveness] is specific to the individual policy,” said Fabrice de Dongo, spokesman for Aviva Canada. “It’s not like your cellphone where you can transfer your number to another carrier.”

Typically, an at-fault accident will affect your rates for six years, said Anne Marie Thomas, senior manager of partner relationships for rate-comparison site

“It lessens over the years,” Thomas said in an e-mail. “For example, a new accident will give a driver a zero star rating, an accident that happened a year ago will give a driver a one-star rating [and so on].”

Tapped or totalled, the result is the same

And typically, the cost of that at-fault claim doesn’t matter. Your rates will go up the same amount, whether you tapped a car in the parking lot or totalled three cars on the highway.

“For example, there is no difference in the impact on rates if the damage is $5,000 or $50,000,” said Malon Edwards, spokesman for the Financial Services Commission of Ontario (FSCO), in an e-mail.

That’s a reason to think carefully before putting minor claims through your insurance, Mitchell said.

“If it’s under $2,000 in damage for just a nick on the bumper … you possibly should not have used insurance,” Mitchell said. “You went overboard – it’s like saying, 'I got a ding in my drywall, so I rebuilt my house.’”

The rules vary by province, but Ontario’s insurance act says your company can’t increase your rates for a minor collision – where the damage to each car was under $2,000, nobody was hurt and the at-fault driver paid for repairs – that happened after June 1, 2016, FSCO said.

That’s only if, in the three years before that minor crash, any cars covered by a policy “were involved in a total of more than one minor accident and, in any of those accidents, the driver of that automobile was at fault.”

Tell your insurance company anyway?

But you shouldn’t keep minor crashes a secret from your insurance company, even if you and the other driver agree to handle it privately, said the Insurance Bureau of Canada (IBC). If they find out, they might cancel your policy.

“We’ve seen situations where one party reports it and the other party doesn’t,” said Pete Karageorgos, director, consumer and industry relations with the IBC. “Then the party that hadn’t finds out that the other person is saying there are injuries or more damage than they’d agreed on.”

And, if someone on your policy has an at-fault claim that’s driving up your rates, is there anything you can do?

“They can exclude the driver from their policy to save on the premium for the cost of [that] driver,” said Insurance Hotline’s Thomas. “But the accident will still be charged on the parents’ policy as they are the owners of the vehicle.”

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