Distracted driving? Say goodbye to full auto insurance coverage!
The consequences of distracted driving go further than the hit your driving record and chequebook take, let alone putting yourself and others at risk. Reliance Insurance wants to make sure you have the facts about the insurance industry’s perspective on the persistent problem of distracted driving.
What exactly is considered distracted driving?
The Traffic Safety Act, restricts drivers from using handheld cell phones, electronic devices like laptop computers, video games, cameras, entering information on GPS units, reading printed materials in the vehicle, writing, printing or sketching, and personal grooming. The offence includes a $300 fine, three demerit points and stays on the driver’s record for three years. In 2021, Medicine Hat Police issued 735 distracted driving tickets under the Traffic Safety Act.
The distracted driving law was brought into effect in 2016 in an attempt to combat distracted driving-related accidents. Recently, the Insurance Bureau of Canada released that 8 out of 10 collisions reported involved distracted driving.
While the government views a distracted driving offence as a minor conviction at this time, insurance companies consider it a major conviction.
This difference in classification has huge implications for both personal and commercial auto coverage. If you get a distracted driving citation, three demerits and a fine are attached to your license, these red flags can have a devastating effect on the coverage insurance companies will offer you.
- On vehicles rated for personal use, insurers are still required to provide liability insurance, however, policyholders can find they will either be ineligible for Physical Damage coverage or pay a premium surcharge that can be as high as 100% or more per policy term until the conviction is removed from their record (3 years from the conviction date). But it gets worse.
- If you lease or finance a vehicle (for pleasure or for business), it will be a condition of your finance agreement that you carry Physical Damage coverage on that vehicle. “Physical Damage Coverage” is an insurance term that includes All Perils Coverage, Collision Coverage, Comprehensive Coverage, Specified Perils Coverage or even Fire and Theft coverage. If you have a distracted driving conviction, you may be ineligible to purchase Physical Damage coverage, meaning the ability to qualify for a lease or financing for a vehicle will be nearly impossible.
- For commercially rated vehicles, the implications can be even worse. Insurance companies can deny writing even basic liability insurance, and those that will offer it impose strict surcharges on affected drivers. If your livelihood depends on operating a vehicle, you run the risk of losing your job. Businesses that cannot insure you cannot employ you. Even if they can find an insurer that is willing to insure you as a driver, they may not be able to afford the premium involved and may have to replace you with someone with a clean driving record.
Reliance Insurance has been a part of the Medicine Hat community for over 20 years and we genuinely hope to contribute to the safety and success of your family and business. We’re sharing this information to not only educate you on the consequences of distracted driving but in the hopes that you will be spared from the devastating impact that a distracted driving collision could have on you or your loved ones.
If you have further questions about the impact that a distracted driving conviction has on your insurance, please contact your trusted Reliance Insurance broker at (403) 526-8800.