Many Canadians are driving more but are they telling their insurers?

Insurers across Canada gave drivers a break on their premiums during pandemic lockdowns to reflect a sharp reduction in the number of kilometres they were driving each month.

But, even as 20% of Canadians report they’re driving to work more often than they were six months ago – and 11% said they now drive to work daily – 44% said they haven’t told their insurance companies about their change in driving habits. Those numbers come from a recent Leger survey commissioned by RatesDotCa and BNN Bloomberg.

What’s more, of that 44% who haven’t told their insurers, 74% said they didn’t know they were supposed to, even though reporting changes in driving habits are a policy condition.

“This information is outlined in the auto policy wordings, however, not everyone reviews these documents thoroughly,” said Kelsey Hawke, RatesDotCa’s auto insurance expert.

But ignorance can have repercussions. Hawke used the example of a driver who gets into an accident on the way to work but has claimed ‘no commute’ on their policy. That driver has misinformed their insurance company, she said, which is a breach.

And, while ignorance explains some of the reporting gap, the survey found 54% of respondents said they know about the requirement to disclose mileage increases but still have not informed their insurers.

“Consumers may feel this information is not relevant and may think they’ll save money by not reporting, or that there would be no impact to their policy,” said Hawke.

What’s more, 46% of survey respondents said they consider not disclosing kilometre increases to be a serious offence, but 51% of them said they still never do so. And, 31% said they believe not reporting an increase isn’t a serious offence.

“Those individuals… may not be aware of the implications of their decision,” said Hawke. “Not reporting changes to usage can be deemed a misrepresentation of policy details and can result in a claim being denied, which can cost the insured a significant amount of money.”

The survey found younger respondents, aged 18-to-34, were more aware of the need to report increases in kilometres driven than those over age 35 (71% versus 61%). Younger drivers also were more likely to report the change to their insurance companies (49% versus 36%).

Hawke speculated one reason could be that the policies are newer, so conversations with brokers or agents about policy requirements may be fresher in the insureds’ minds. The high volume of information about rates and rebates streamed out by insurers during the COVID-19 lockdowns also likely played a part.

“These drivers would have been informed of the importance of informing their insurance provider of usage changes on many different occasions,” said Hawke.

 

Feature image by iStock.com/buzbuzzer