Is it possible to be denied car insurance in Alberta?

There is a lot of misinformation that goes around when it comes to purchasing car insurance. While you cannot be denied mandatory car insurance coverage in Alberta, you can be denied optional coverage by insurers. 

Mandatory Car Insurance in Alberta 

The Government of Alberta requires all drivers to carry the following insurance: 

• Third-party liability insurance – this helps cover costs if you cause bodily injury and/or property damage if you are at fault or partially at fault in an accident; it also includes legal expenses. 
• Accident benefits – include medical, disability, death and funeral expense benefits. 
• Direct compensation for property damage insurance – covers damage to your own vehicle if you are not at fault or partially at fault in an accident.  

Optional Car Insurance in Alberta 

Optional car insurance is anything above the mandatory minimum coverage required by the Government of Alberta, such as: 

• Collision – assists with the costs of repairs to your property if you are at fault or partially at fault in an accident. 
• Comprehensive – helps cover your property if it is damaged due to a covered peril such as a hit-and-run, hail, or theft.  
• Loss of Use – ensures that transportation costs are covered such as a rental car, transit or taxi if your vehicle is being repaired after a covered claim. 

Why would I be denied optional auto insurance coverage? 

For some specific coverages, there are eligibility requirements. For example, you will need to have no claims within a specific period of time to qualify for a claims-free discount or disappearing deductible coverage. Or your car may need to be manufactured within a specific time frame to qualify for a depreciation waiver (or guaranteed replacement cost loss settlement).  

However, for the more standard optional coverages, there are only a few scenarios where you may be denied: 

• If you have been cancelled by a previous insurer for non-payment, misrepresentation or other serious abuse.  
• If you have a criminal conviction related to driving such as impaired driving or driving while suspended or without a license. 
• If you have multiple serious driving infractions (tickets) such as failing to remain at the scene of an accident, speeding over 50km/h over the limit, careless driving, and distracted driving. 
• If you have a lot of claims.  

The more recent these incidents, the more likely you are to be denied coverage. Generally, major violations and claims stay on your record for five to ten years, depending on the insurer.   

Other Cases of Being Denied Auto Insurance in Alberta 

There are a few other scenarios where you may be denied car insurance in Alberta: 

• You do not have a permanent address in Alberta. 
• You do not have a driver’s license. 
• You do not have a bill of sale, lease agreement or vehicle registration for the car you want to insure.  
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