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Frequently Asked Questions

Please visit our new and interactive Frequently Asked Questions website. It’s searchable, contains information on every sector and can be found here:

http://faqportal.fsco.gov.on.ca

The following provides answers to some of the questions most frequently asked of FSCO's contact centre staff. Questions and answers are sorted either by insurance or pensions. Frequently asked questions about the Motor Vehicle Accident Claims Fund (MVACF) are posted elsewhere on this website.

Mortgage Brokers Frequently Asked Questions

Insurance - General

Automobile Insurance

Pensions

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Insurance - General

Question: How do I obtain an insurance quote?

Answer: Insurance quotes are distributed by various means in Ontario. Traditionally, an agent or broker would provide this information. Today, employer groups, Internet or telephone call centres are also used to provide quotes. In any case, always ensure that you are dealing with a licensed representative and insurance company. Remember, it is important to obtain more than one quote when shopping for insurance.

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Q: How do I choose an insurance agent or broker?

A: Insurance agents and brokers are licensed to negotiate insurance contracts and to service policyholders. Insurance agents usually represent one insurance company or related groups of insurance companies, while brokers typically represent several insurance companies.

When choosing an agent or broker you should:

    • ask relatives, friends, and business associates for referrals;
    • make sure the agent or broker is licensed by the Financial Services Commission of Ontario (FSCO), if an agent, or by the Registered Insurance Brokers of Ontario, if a broker;
    • try and find an agent or broker with special professional qualifications or years of experience.

Visit the Licensing & Registration section of this website to learn more about agents licensed in Ontario.

Q: What is the role of an insurance agent or broker?

A: Insurance agents and brokers provide services such as:

    • advising you on the right insurance product to fit your insurance needs;
    • explaining the cost and coverage of your policies;
    • advising you about policy exclusions and limitations, and how they affect you;
    • informing you of new insurance policies or products;
    • reviewing your insurance portfolio with you every year;
    • answering your insurance questions and helping you with any claims.

Q: How do I choose an insurance company?

A: Insurance companies like agents and brokers are licensed to sell various insurance products. Just like choosing an insurance agent or broker, ask relatives, friends, and business associates for referrals. Another good source of information about a company’s licensing status is FSCO, which regulates and licences insurance companies in the province.

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Automobile Insurance

Q: What is the mandatory amount of automobile insurance that I must have to drive in Ontario?

A: The mandatory automobile insurance coverages in Ontario are: $200,000 of third party liability, statutory accident benefits, uninsured automobile and direct compensation-property damage.

Please refer to Understanding Automobile Insurance for additional information.

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Q: What additional automobile insurance coverage can I buy?

A: In addition to the mandatory insurance, drivers can purchase coverages such as:

    • Collision coverage: this coverage pays for repair or replacement of your vehicle if it collides with another vehicle, flips over, or crashes into an object, as a result of accidents that you cause.
    • Comprehensive coverage: this coverage pays for losses from incidents other than a collision, such as fire, falling objects, theft and vandalism.
    • Increased third-party liability limit: the mandatory amount is $200,000 but you can increase the amount up to the limits the company provides. Additional protection of $1,000,000 is usually purchased.
    • Underinsured motorist coverage: part of Family Protection Coverage, it protects you or an eligible member of your family, to the same limits as your Third-Party Liability coverage, if you are involved in an automobile accident where you are not at fault, with someone who carries less insurance, no insurance, or is an unidentified driver.

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Q: I have medical benefits through a plan at work. Why do I need to purchase statutory accident benefits on my auto insurance policy?

A: In Ontario, automobile insurance is mandatory. The government has a responsibility to provide a product which addresses the needs of as many insurance consumers as possible and ensures that the interest of the public at large is protected. This is why all vehicles operated on the road must carry certain mandatory coverages. These coverages are liability, statutory accident benefits, uninsured automobile and direct compensation-property damage.

The statutory accident benefits provided to persons insured are detailed in the Statutory Accident Benefits Schedule (SABS). Coverage includes, among other things, income replacement benefits, supplementary medical and rehabilitation benefits, death and funeral benefits and long-term care benefits. These benefits are available not only to the owner of the policy, but they could also be accessed by passengers in the vehicle, as well as pedestrians, who may not have coverage under their own automobile insurance policy.

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Q: What factors affect my automobile insurance premium?

A: Insurance companies use a variety of risk factors to determine a premium. The cost of automobile insurance for different drivers varies as the level of risk for the insurance companies varies. Factors that could affect your premiums include:

    • driving history, including previous at-fault accidents and driving violations;
    • type of vehicle including make, model and model year;
    • where you keep and drive your vehicle;
    • the age and gender, along with the number of years licensed;
    • the number of kilometres driven in a year;
    • whether the vehicle is used for pleasure, commuting or business purposes.

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Q: How does my company determine whether I am at fault in an accident?

A: In Ontario, companies are required to use Regulation 668, Fault Determination Rules, to assess fault in an accident for purposes of vehicle damage. These rules:

    • cover more than 40 accident situations using diagrams to illustrate specific occurrences;
    • can be applied to almost every possible road collision scenario; and,
    • are applied regardless of road or weather conditions, visibility, point of impact on the vehicles, or the actions of pedestrians.

These rules help insurance companies deal with vehicle damage claims quickly and economically.

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Q: The police officer who attended the accident scene told me I was not at-fault in the accident. Why did my insurance company tell me that I am at-fault?

A: A police officer may say that neither of the drivers were at-fault in a situation such as a vehicle being unable to stop on an icy road and rear-ending another vehicle. Such a comment relates to the laying of charges and should not be taken as an opinion about how the Fault Determination Rules apply to an auto insurance claim. In a case like this, the insurer would apply the rule stating that a vehicle which rear-ends another is at-fault.

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Q: How does an at-fault accident affect my premium?

A: In many cases, if you have your first at-fault accident after six or more years of claims-free and conviction-free driving, your premium may not change or may increase by a relatively small amount. Some insurance companies offer endorsements to drivers that will allow them to maintain their driving record or premium after a first at-fault accident. Most companies will change your driving record to reflect the accident and increase your premium by a small amount. You will need to regain your six years of accident-free driving before you return to lower premiums.

If this is your second at-fault accident in the last six years, you can expect your premiums to increase quite significantly.

If you have any convictions or cancellations of a policy, in addition to an at-fault accident, or are an inexperienced driver with an at-fault accident, you may be considered to be a high-risk driver and be placed with an insurer that specializes in these types of risks.

When you are shopping around for insurance, you should always ask the broker or agent how your premiums will be affected after an at-fault accident.

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Q: Does a drivers licence suspension affect my auto insurance rates?

A: Insurance companies increase rates for some types of licence suspensions, such as those due to driving related convictions. They may also not renew your policy or may cancel it due to these types of suspensions, if they have an approved underwriting rule permitting them to do so. Insurance companies do not raise rates for licence suspensions that are due to medical reasons, non-payment of fines (e.g., parking tickets) or where the suspension is for less than a year Because each insurance company has unique underwriting rules and rating criteria that deal with licence suspensions, you should contact your insurance agent or broker to find out how a suspension will affect your rates. Refer to FSCO Bulletin A-04/06 - An Administrative Lapse or a Suspension of a Driver's Licence.

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Q: What can I do if my insurance agent or broker filled out my Ontario Application for Automobile Insurance incorrectly?

A: If the application was completed in person, then a licensed insurance agent or broker should have asked you to read and sign it to confirm that all of the questions had been answered correctly.

If your insurance agent or broker is completing the application for you over the phone, request a completed hard copy to review and insist that it not be submitted to your insurance company until you sign it.

Consider the following if the application was completed by phone:

  • Was the conversation taped by your insurance agent or broker’s company?
  • Was your information put into an electronic or hard-copy record?
  • Does the insurance agent or broker recollect that you provided information that he/she omitted or does he/she remember including incorrect information?

If the insurance agent or broker remembers the omitted/incorrect information, ask him/her to communicate this to the insurance company immediately for further review. If the insurance company’s review is unfavourable, and you cannot resolve the issue with the company, you may want to contact the General Insurance OmbudService and/or obtain legal advice.

Do not sign the application unless you are sure that all relevant information has been included by your insurance agent or broker and that the information included in the form is accurate. Take time to review your personal information and the Ontario Automobile Policy, and ask your insurance agent or broker questions.

You are responsible for checking your application for accuracy. By signing this form, you are agreeing to all the statements in it. Even if your answers are written by someone else, you are responsible for them.

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Q: What is an excluded driver endorsement?

An excluded driver endorsement is an agreement that allows you to exclude specific drivers from being covered under your auto insurance policy. It is typically used by people who want to exclude a young driver in their household, or a driver with at-fault accidents or convictions, to avoid higher premiums.

An excluded driver endorsement is signed by you and the driver(s) you want to exclude from your policy. By signing the endorsement, you promise to prohibit the excluded driver(s) from driving the vehicle described in the agreement. The excluded driver, by signing this agreement, promises not to drive this vehicle and acknowledges that if he/she does, there is no liability insurance in effect. However, if the excluded driver is found to have operated the vehicle while excluded, along with there being no liability insurance in effect, the owner of the vehicle and others legally responsible for the acts of the driver may be held personally liable for damages and injuries in the event of an accident. In addition, the insurance company may terminate or non-renew the policy for material misrepresentation or breach of contract if the insurance company has filed an underwriting rule permitting it to do so.

You can request an excluded driver endorsement from your insurance company at any time, and your insurance company must allow it to be added to your policy. To add such an endorsement to your policy, fill out the Excluded Driver Ontario Policy Change Form and send it to your insurance company.

Note: Insurance companies cannot demand that an excluded driver endorsement be placed on your policy.

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Pensions

Q: How are pension plans regulated in Ontario?

A: Pension plans registered in Ontario are required to comply with the Ontario Pension Benefits Act. FSCO regulates compliance with the Act. This includes oversight of the requirements for plan documents and amendments, annual filings, disclosure to members, financial reporting and other compliance matters.

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Q: How can I find out if my pension plan is registered in Ontario?

A: Most Ontario registered pension plans are listed in FSCO's Pension Plan Information Access, or you can check with your plan administrator.

Certain plans are excluded from Pension Plan Information Access for privacy reasons. Also, if your employer has locations in other provinces, your pension plan may be registered in another jurisdiction. As noted below, pensions of employees in federally-regulated employment are not regulated by FSCO.

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Q: I’m an employee of a bank and a member of a bank pension plan. Is my plan regulated by FSCO and subject to the Ontario Pension Benefits Act?

A: No, the pension plans of banks, airlines, railways and other companies regulated by the federal government are regulated by the federal Office of the Superintendent of Financial Institutions which may be contacted through http://www.osfi-bsif.gc.ca .

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Q: How can I get information about my pension plan?

A: Your plan administrator is your first source of information on the pension plan. As well as providing information required by the Pension Benefits Act, your administrator is available to answer your pension plan questions.

A complete list of the information that your administrator must provide can be found at Your Pension Rights, in the section Information Provided to Plan Members on page 46.

Contact information for the administrator and information on the status of pension plan filings for most Ontario pension plans is available through FSCO's Pension Plan Information Access. If you still cannot obtain the information you need, you may wish to access FSCO’s complaint resolution procedure.

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Q: My employer has gone bankrupt. Is my pension money safe?

A: To protect your pension benefits, the Pension Benefits Act requires that contributions to a pension plan, and the related investment income, be held in a pension fund which is separate from the employer.

With the bankruptcy, FSCO will appoint an administrator to protect the interests of the pension plan members. The administrator will take control of the pension plan and pension fund and will wind up the plan. Where there are not sufficient assets to provide all benefits, limited protection is provided by the Pension Benefits Guarantee Fund.

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Q: Does the Pension Benefits Guarantee Fund protect all Ontario-registered pension plans?

A: No, the Pension Benefits Guarantee Fund (PBGF) provides limited protection for single-employer defined-benefit pension plans. No PBGF coverage is provided for defined-contribution pension plans; these plans provide for an accumulation of contributions and do not promise a fixed benefit. Likewise, multi-employer pension plans are excluded from PBGF coverage.

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Q: I want access to the funds in my pension plan. Why are the funds “locked-in”?

A: A principal objective of the Pension Benefits Act is to ensure that pension plan members have a measure of income security during their retirement years. To achieve this goal, pension-related funds must generally be locked-in until the plan member reaches pensionable age, at which time the funds must be used to provide the member and, if appropriate, the member’s spouse, with a regular income for the remainder of his or her life.

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Q: I have a locked-in retirement account. Can I get my money out?

A: In Ontario, your ability to take money from a locked-in retirement account is subject to certain rules set out in the Pension Benefits Act. Normally you must wait until 10 years prior to being eligible to start your pension, usually at age 55, before receiving a payment from your locked-in retirement plan. It should be noted that there are minimum and maximum limits on how much you can receive in any one year. However, in certain situations - such as financial hardship or shortened life expectancy - you may be eligible to apply for special access to the money in your locked-in retirement plan. For further information see Financial Hardship Unlocking.

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HELPFUL INFO