High-risk driver in Québec, what the law requires and where to get insured

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To an insurer, a high-risk driver is what the Autorité des marchés financiers (AMF) calls a substandard risk (risque aggravé in French): a risk whose probability is too high for the insurer to assume under the normal conditions of a contract, so it adds restrictive clauses or requires a higher premium. Your obligations stay the same: declare your situation accurately before you sign, then promptly report anything that increases the risk during the contract. If an insurer refuses you, turn to other insurers or to a broker: through the Risk Sharing Plan, drivers who represent a higher risk are insured collectively by all insurers. And if no one accepts you after five attempts, the Information Centre of the Groupement des assureurs automobiles (GAA) guarantees you the minimum civil liability insurance required by law.

The Civil Code of Québec sets out your obligations and what follows if they are not met:

When	What the law requires	If you don't
Before you sign	Represent the facts you know (art. 2408)	Nullity or reduced indemnity (art. 2410, 2411)
During the contract	Promptly report an increase in risk (art. 2466)	Reduced indemnity (art. 2466, 2411)
New premium proposed	Accept and pay it within 30 days (art. 2467)	The policy ceases to be in force

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What “high-risk driver” means

The expression has two meanings: the profile of a driver considered riskier than an insurer's usual clientele and, in law, an increase in risk (aggravation du risque), that is, a change during the contract that makes the risk accepted by the insurer heavier.

No official list defines such a driver. According to the AMF, insurers are free to adopt the classification criteria and to establish the premium levels they deem adequate: each one draws its own line. The GAA states that an insured involved in several losses over the past three years may represent a higher risk, and the AMF lists having no traffic offences and no accidents, at fault or not, among the things that can lower a premium. A cancellation for unpaid premiums, which the AMF lists among the reasons a contract can end, also calls for an accurate answer if a new insurer asks about it. The other premium factors are reviewed in what affects your auto insurance premium.

Declaring the risk before you sign

Article 2408 of the Civil Code requires the client, meaning the person taking out the insurance, and the insured if the insurer requires it, to represent all the facts known to them that are likely to materially influence an insurer in setting the premium, appraising the risk or deciding to cover it. Facts that the insurer knows or is presumed to know because of their notoriety are excluded, except in answer to inquiries. Under article 2409, the obligation is deemed properly met if the representations are such as a normally provident insured would make, made without material concealment, and if the facts are substantially as represented.

The Q.P.F. No. 1, the standard owners' policy approved by the AMF, repeats this rule in Article 5 of its General conditions. Its introduction lists what must be reported before the contract is made and after, as well as at renewal: any change in the use of the vehicle, any persons other than the named insured who drive it, any past accident or loss, any conviction for an offence under the Highway Safety Code, any criminal conviction, any change or addition to the vehicle and any change to the personal circumstances of the named insured or drivers. In case of doubt, the form advises contacting the insurer. Our guide to understanding your Q.P.F. No. 1 policy covers the rest of the contract.

What a misrepresentation can lead to

Under article 2410, any misrepresentation or concealment of the facts nullifies the contract at the instance of the insurer, even with respect to losses not connected with the risks so misrepresented or concealed. Auto insurance, however, falls under damage insurance, which includes liability insurance and property insurance (article 2396), and in that field article 2411 softens the rule: unless the client's bad faith is established or it is established that the insurer would not have covered the risk had it known the facts, the insurer remains liable for such proportion of the indemnity as the premium it collected bears to the premium it should have collected. The Q.P.F. No. 1 applies these rules to its chapters A (civil liability) and B (damage to the vehicle), which the English form calls Section A and Section B, with the same proportional calculation when the insurer must still pay.

Say, for example, a driver did not declare that another person regularly drove the vehicle, and the insurer, had it known, would have charged a premium one quarter higher. The premium collected is then four fifths of the premium that should have been collected: if neither bad faith nor a refusal of the risk is established, the insurer pays four fifths of the indemnity. The proportions are fictional; only the mechanism matters.

An increase in risk during the contract

Under article 2466, you must promptly notify the insurer of any circumstances that increase the risks stipulated in the policy and that result from events within your control, when they are such as to materially influence an insurer in setting the rate of the premium, appraising the risk or deciding to continue to insure it. The Q.P.F. No. 1 requires such changes to be reported “promptly.” The AMF mentions, for example, using the vehicle for business, often lending it to another driver, moving or having an accident; the Q.P.F. No. 1 also lists any conviction for an offence under the Highway Safety Code and any criminal conviction among the information to report.

What the insurer can do

Under article 2467, an insurer that has been notified may cancel the contract or propose a new rate of premium in writing. You must then accept and pay the premium at the new rate within 30 days of the proposal, otherwise the policy ceases to be in force. If the insurer continues to accept your premiums or pays an indemnity after a loss, it is deemed to have acquiesced in the change notified to it.

If you say nothing, article 2466 makes article 2411 apply, adapted as required: the proportional indemnity rule therefore also applies to an increase in risk that was not reported.

For cancellation, the Q.P.F. No. 1 sets the rules: according to the AMF, after the first 60 days, the insurer can cancel only if the risk has increased significantly or if the amounts owing have not been paid, and the cancellation takes effect 30 days after you receive its letter. Our guide to switching auto insurers in Québec, from renewal to cancellation covers notices, time limits and refunds.

The Automobile Insurance Act requires the owner of any automobile operating in Québec to have a liability insurance contract guaranteeing compensation for property damage caused by that automobile (section 84), for a minimum amount of $50,000 (section 87). It also requires the GAA to establish a mechanism designed to enable every automobile owner to find an authorized insurer for that insurance (section 170). The GAA describes its mandate this way: to guarantee the liability insurance required by law, regardless of the risk a policyholder represents.

The first step, according to the GAA: being refused by one insurer does not shut you out of the market, and premiums can vary greatly from one insurer to another; check with other insurers or brokers and compare offers.

The Risk Sharing Plan (Plan de répartition des risques) works behind the scenes. According to the GAA, insurers may transfer drivers who present a greater risk for them to the plan; these high-risk drivers are then insured collectively by all insurance companies, while continuing to do business with the insurer of their choice. You therefore do not apply to the plan yourself: it is the insurer, reached directly or through a broker, that uses it.

The GAA Information Centre, if no one will insure you

If no insurer will cover you, the GAA's Insurance Information Centre offers a free help and assistance service. The GAA first asks you to:

have tried to obtain insurance from five direct insurers or brokers yourself;
show that you were not able to get insurance.

You then complete the online form on the GAA's Guarantee access page, or reach an agent at 514-288-4321 (Montréal area) or 1-877-288-4321 (elsewhere in Québec), Monday to Friday, from 8:30 a.m. to 4:30 p.m. The agents will guarantee you the minimum civil liability insurance required by law. One limit: if coverage is refused because of, among other things, a false declaration, at the time of purchase or of a loss, a fraud or a criminal act, the Centre can only help you get insurance for that minimum.

A record that improves with time

A heavy record does not stay heavy forever: losses and demerit points do not stay on file indefinitely, and our guide to your claims history file and driving record gives the time frames. The AMF indicates that a premium can be lower with a licence held for several years, without offences or accidents, and the GAA states that a clean claims record can give access to preferred rates. Since criteria vary from one insurer to another, a record that gets lighter is worth a new comparison at renewal.

Frequently asked questions

I forgot to declare a fender-bender. Is my contract void?

Not automatically. Nullity only occurs at the instance of the insurer (article 2410), and your representations are measured against those a normally provident insured would make (article 2409). The simplest course is to notify your insurer as soon as you notice the omission.

A broker filled out my application. What happens if it contains an error?

The obligation to declare remains yours, but article 2413 of the Civil Code allows proof by testimony that representations entered or suggested by the insurer's representative or by an insurance broker do not correspond to what was actually represented. Still, reread the application and Item 6 of your Declarations, “Important statements for analyzing the risk,” before you sign.

Can the GAA help me get more than the minimum civil liability coverage?

Yes, where possible. According to the GAA, after studying your file, its agents try to find more comprehensive insurance: a higher amount of civil liability insurance or coverage for the vehicle itself (collision, fire, theft, vandalism). This enhanced mechanism applies only to private passenger vehicles, under certain conditions.

Before you ask for quotes

Get your statement from the Fichier central des sinistres automobiles from the GAA and your driving record from the SAAQ, free for your own record.
Declare everything accurately: losses, convictions, drivers, use of the vehicle.
If an insurer refuses you, ask another one, or a broker, whether it can insure you through the Risk Sharing Plan, and keep track of each attempt: the GAA Information Centre asks for five.
Compare quotes that cover the same protections and the same deductibles.

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