Our passion is helping our clients understand insurance. Through conversations with clients, particularly those in our Resort Program, we discovered that there is misinformation around what a commercial auto policy covers. We would like to help steer you in the right direction.
What Are "Filed Rules"?
In Ontario, auto insurance is heavily regulated by the Financial Services Commission of Ontario (FSCO). The insurance companies must remit “filed rules” that they must abide by when insuring auto policies. "Filed rules" can vary from one insurance company to the next and cannot be negotiated by brokers.
Essentially, "filed rules" are rules of engagement from the insurance company. FSCO audits these rules to ensure compliance. The rules detail what will be insured (distance travelled, use of vehicle, type of vehicle, etc.) and for how much (based on driving experience, claims history, number of convictions, etc.).
Your policy is rated based on the information provided at the time of application by way of the Ontario Auto Application and the Commercial Vehicle Supplement, or updates provided to your broker. Examples of updates that could be included are:
- the distance you travel with your vehicle
- who drives your vehicle
- what your vehicle is used for
Vehicles Used For Public Transport
If your vehicle is being used for public transportation, meaning that you are providing transportation to guests using a plated vehicle, then your broker must be notified. Also, it must be reported to the insurance company so your policy can be re-evaluated. If this is not disclosed, you are at risk of not having coverage (at minimum), except possibly Accident Benefits, should a claim occur.
Always Provide Accurate Information
When completing auto applications, it is critical to be 100% accurate in the description of your vehicle use as it is the basis of your policy and will impact premium, insurability and the outcome of claims.
In fact, the Commercial Vehicle Supplement has a very important question on the subject of guest transportation:
“Are any of the insureds vehicles used for public transportation?”
The answer must be a “YES” when providing transportation to your guests.
Also, most insurance companies will require a minimum of 3 years of insurance experience when transporting guests. This means that you may be required to be insured with a high-risk insurer for 3 years until that tracked experience is documented and your broker can obtain coverage from a regular market. These are important steps to remember because insurance is purchased for the purpose of being able to submit a claim if needed. We would not like to see your coverage cancelled or denied due to a material change or misrepresentation.
Communicating with your broker when there are changes to your operations is the best way to ensure that you are properly covered on your policy. We are here to help you understand your policy and answer your questions; do not hesitate to reach out.