Auto Insurance Policy

Honesty is the Best Policy When Renewing Your Auto Insurance Policy

Every year millions of Ontarians renew their auto insurance policy. As a plaintiff personal injury lawyer, I have seen first hand what happens when someone is not totally honest. It often leads to serious unintended consequences if the vehicle they own is involved in an accident.

Parents often wonder if they should add their children living under their roof to their auto insurance as a named insured. The short answer is that if you are going to give permission to your children to drive your vehicle, then you should ensure that your children are added as named insureds or occasional drivers to your policy, unless they have their own auto insurance.

You must insure all drivers who reside under your roof and use your vehicle on your policy. This means you have a duty to call your insurer and let them know that your son or daughter is a licenced driver living in your household who will drive your vehicle and should be added to your policy, either as a named insured or an occasional driver.

Many times parents do not want to insure their children as a licensed driver living in their household because their insurance premiums will significantly increase. The increase in premiums is a small sacrifice as compared to if your child drives you vehicle and is not listed as a named insured or an occasional driver under your policy.

The law requires that one must notify one’s auto insurer or local agent in writing of any changes in the risk material to the auto contract and within one’s knowledge.

In a recent case , parents renewed their auto insurance policy with Allstate and failed to disclose that their 17-year old son was a G2-licensed driver in their household. The parents incorrectly assumed that they did not need to add their son to their full coverage auto policy. Shortly after the parents renewed their auto policy, their son drove their vehicle and caused an accident. Allstate voided the parent’s auto insurance because the parents failed to disclose a material fact that would affect the risk of the auto contract: their son was a G2-licensed driver in their household.

The parents brought an application before the Court seeking a declaration that Allstate’s policy was valid. The court ruled that the parents failed to inform Allstate of a material change in risk – that their son was a licensed driver in their household with a G2 license and permitted him to drive on his own. It was clear that a high-risk driver in the household able to drive on his own would substantially affect the premium. Therefore, the Court dismissed the parents’ application.

Since the parents (and the son) did not have any insurance coverage from Allstate, if they lost in their lawsuit stemming from the car accident, they would be personally responsible for any damages awarded against them or to even fix their damaged vehicle. I am sure that a reasonable person would agree that paying a few hundred dollars every month in increased premium is better than personally paying hundreds of thousands or even millions depending on the lawsuit.

This case provides an important lesson to everyone with auto insurance: always be honest when renewing or obtaining auto insurance. Honesty really is the best policy.


1 Seetaram v. Allstate Insurance Company of Canada, 2019 ONSC 683 (CanLII),

View all posts by
Previous Article:
Next Article:
Copyright © Lerners Personal Injury Group. All rights reserved.