If you’ve purchased car insurance in Ontario before, you know that it can be complicated.

There are countless rules, regulations and acts that need to be considered while shopping for car insurance policies and on the road. One of the most important (but lesser-known) acts is the Compulsory Automobile Insurance Act (generally shortened to CAIA).

Continue reading to learn more about the CAIA, why it’s important, the consequences of breaking the act and much more.

What is the CAIA?

The CAIA is a Canadian automobile insurance act that states the following:

“1) Subject to the regulations, no owner or lessee of a motor vehicle shall,

(a) operate the motor vehicle; or

(b) cause or permit the motor vehicle to be operated,

on a highway unless the motor vehicle is insured under a contract of automobile insurance. 1994, c. 11, s. 383; 1996, c. 21, s. 50 (3).”

What does this mean for drivers in Ontario? In short, it means that drivers need to carry a motor vehicle liability insurance card (also referred to as an insurance card or pink slip).

What does “contract of automobile insurance” mean?

In this situation, a “contract of automobile insurance” is an agreement between a driver and a car insurance company in Ontario (commonly referred to as a car insurance policy).

Why is the CAIA important for drivers in Ontario?

The CAIA plays an imperative role in keeping drivers safe and making sure that they are financially covered in the event of an accident.

If the government didn’t enforce auto insurance, some drivers might not be able to cover the expenses they’re responsible for (personal or third-party). Enforcing auto insurance also ensures that you’ll be financially covered if you’re involved in a car accident in which you’re not deemed “at-fault”.

What are the consequences of breaking the CAIA?

The consequences for breaking the CAIA depend on the severity of the event and the number of prior offences you have on your record.

The CAIA states the following regarding offences:

“Every owner or lessee of a motor vehicle who,

(a) contravenes subsection (1) of this section or subsection 13 (11); or

(b) surrenders an insurance card for inspection to a police officer, when requested to do so, purporting to show that the motor vehicle is insured under a contract of automobile insurance when the motor vehicle is not so insured,”

This means that drivers who do not have valid auto insurance or provide misleading information about owning auto insurance have to face the following consequences:

First offence for driving without an insurance card — The driver needs to pay a fine ranging from $5,000 to $25,000.

Subsequent offences for driving without an insurance card — The driver needs to pay a fine ranging from $10,00 to $50,000 and can potentially lose their license for up to one year.

Additionally, it’s worth noting that in some situations, the justice may order that the vehicle is impounded for up to three months if a driver commits one of the following offences:

“(a) that was operated in contravention of subsection (1);

(b) for which a false statement in respect of insurance was made in contravention of subsection 13 (11); or

(c) for which an insurance card was produced in contravention of clause (3) (b),”

So, if you don’t want to deal with hefty fines and the temporary loss of your license and/or vehicle, we suggest that you keep a copy of your insurance card accessible in your vehicle at all times.

You can chat with your insurance broker if you’d like to learn more about the consequences for other niche situations regarding the CAIA.

Can you use digital proof of insurance in Ontario?

In the past, drivers needed to have a physical copy of their mandatory automobile liability insurance card on hand while driving.

Thankfully, this is no longer the case — if you’re not a fan of keeping physical documents in your vehicle, you can opt for digital proof of insurance.

In 2020, the Ontario government passed a law that allows drivers to utilize digital proof of insurance on their smartphones or tablets. If you happen to get pulled over, all you need to do is flash your phone or tablet and you’re set.

Bonus — Ensure that your phone or tablet has a sufficient amount of battery power before you hit the road. If you don’t have time to charge your device completely, you can opt for an external battery or purchase a charger that’s compatible with your vehicle. Doing this will prevent mishaps or issues from occurring down the line.

Finding car insurance in Ontario

Finding an affordable car insurance policy in Ontario can feel like looking for a needle in a haystack; it takes time and patience. Unfortunately, not everyone in Ontario has the time to sit down and compare various options. If you’re looking for top-notch coverage at a rock-bottom price, you should reach out to a Surex insurance advisor today.

Our team of experienced insurance advisors is always happy to answer any questions that you may have about the Compulsory Automobile Insurance Act Ontario rules and regulations. After we’ve answered your questions, we can help you find the perfect, personalized policy. Within ten short minutes, we can provide you with ten cheap car insurance quotes.

Contact a Surex insurance advisor today to learn how you can save up to 25% on insurance by bundling your auto and home coverage with one of our providers.

What have you learned about the CAIA?

The Automobile Insurance Act Ontario rules and regulations may seem confusing at first glance, but after doing some research, you can see that they are quite clear.

As a reminder, you need to carry a physical or digital copy of your insurance card while driving in Ontario. Doing this will ensure that you won’t run into any issues down the road.

If you have any questions or comments, don’t hesitate to reach out to a Surex insurance advisor as soon as possible. We’re always happy to help you find and save on car insurance in Ontario.