Facility car insurance

All Canadian drivers are required by law to carry car insurance, but a small group of drivers may have trouble getting a traditional policy. Drivers who have been in multiple accidents and/or have multiple tickets might find that insurance companies are unwilling to underwrite a standard auto insurance policy for them. Instead, these drivers may have to get facility insurance.


Most insurance companies in Ontario will underwrite a standard car insurance policy (albeit with a possible surcharge) if you’ve had just a few minor or moderate traffic incidents. If you’ve been in multiple serious accidents or have many tickets, however, a facility car insurance policy might be your only option.

The following is an explanation of facility insurance for Ontario drivers, including why you might need it if you’re a high-risk driver and what to expect if you do have to get it.

What Is Facility Insurance for High-Risk Drivers?

Facility insurance is an insurance of last resort that’s reserved for only the highest-risk drivers. The high-risk insurance is what you need if no insurer in Ontario will underwrite a traditional car insurance policy, and you should only get facility insurance if no company will give you a more normal policy.

Each insurer has its own specific underwriting criteria, but all insurance companies look at the same general things. Insurers might deny you a standard policy if you have any of the following:

  • Accidents resulting in insurance claims
  • Traffic tickets and fines
  • Coverage cancellations due to missed payments
  • Convictions arising from insurance fraud or misrepresentation

Even if you’re uninsurable through a normal policy due to one or more of these factors, facility insurance guarantees that you can still obtain coverage. Every driver who’s legally licensed can purchase facility insurance if they need to.

Essentially, facility car insurance is:

  • Available to all drivers in Ontario, including the highest of high-risk drivers
  • Offered even to drivers with histories of accidents, tickets, coverage cancellations, and insurance fraud
  • An option of last resort, which you should get only if no other policy is available to you

How Does Facility Insurance Work?

Most drivers find facility insurance in Ontario through an insurance agent, and agents will only recommend this type of insurance when all other options have been exhausted and denied.

Should you purchase facility auto insurance, the insurance is provided through the Facility Association. The Facility Association is an administrative office that was formed to guarantee all drivers, including the highest-risk drivers, could obtain some form of auto insurance.

The Facility Association doesn’t actually execute high-risk insurance policies, however. Instead, the association relies on carriers that offer high-risk auto insurance in Ontario to carry out the policies. These three companies are acting on behalf of the Facility Association, though, and have the backing of the association for these policies. An insurance broker can help you through the process of obtaining insurance from the Facility Association.

Notably, drivers in multiple provinces and territories can get facility insurance. Ontario, New Brunswick, Newfoundland and Labrador, Nova Scotia, Northwest Territories, Yukon, and Nunavut all offer a variation of this high-risk auto insurance.

An insurance agent can guide you through the process of getting facility insurance in Ontario, but it generally goes as follows:

  1. You first apply for more standard high-risk auto insurance policies
  2. If all insurers deny you, you apply for facility insurance.
  3. Your facility policy is backed by the association but administered by an insurance company.

Regular Insurance vs. Facility Insurance

Facility insurance differs from regular car insurance in two prominent ways.

First, facility insurance is purchased through the “facility association residual market” (or “FARM”) instead of the “voluntary market” that regular policies are bought from. In the voluntary market, insurance companies voluntarily compete to secure your business. In the FARM, the market is set because it’s specifically for drivers who insurance companies don’t want to insure.

(The FARM is available to both high-risk personal drivers and high-risk commercial drivers.)

Second, facility insurance tends to be much more expensive than regular car insurance. In many situations, facility policies cost two to three times what a regular policy does.

In sum, there are two main differences between facility car insurance and regular car insurance:

  • Facility insurance is purchased via a non-voluntary market
  • Facility insurance costs two to three times more than regular insurance

Will Facility Insurance Affect Car Insurance Rates?

Facility insurance costs a lot more than regular car insurance, which is why this is normally considered the insurance of last resort. As mentioned, you can expect to pay two or three times more for a facility policy than you would for even a high-risk insurance policy that’s available through the voluntary market if one were available to you.

On average, a facility policy might cost $8,000 to $10,000 a year. In some cases, annual premiums can reach more than $20,000 for the riskiest of high-risk drivers. Facility premiums are this high because rates usually correlate with an insurer’s risk exposure. Even with these premiums, the Facility Association still regularly loses money on facility policies.

Importantly, these are the premiums for facility policies -- and not necessarily for regular policies after you can once again obtain a policy through the voluntary market.

Most people who purchase facility insurance through the Facility Association have this type of insurance for three years if they don’t have additional driving infractions or incidents. After drivers can get a non-facility policy, the fact that they once carried facility insurance has no bearing on their standard auto insurance policy’s premiums.

Thus, you should be prepared for high premiums if you need to get facility auto insurance:

  • Facility insurance often costs $8,000 to $10,000 per year
  • Facility insurance can cost $20,000 or more each year
  • Many people need facility insurance for about two years
  • Simply having facility insurance won’t increase your premiums in the future

Eligibility criteria:

If you have a valid license, and your car is registered and has valid license plates, but you have had difficulty getting auto insurance with an individual company, you may be eligible to be insured through the Facility Association. FAQs On High-Risk Driver Insurance


How much is insurance for a high-risk driver?

Exactly how much high-risk drivers must pay for car insurance depends on the specifics of their situation. In many cases, drivers who need insurance through the Facility Association pay two or three times more than drivers who can get a policy from an individual insurer. Facility insurance policies regularly cost $8,000 to $10,000, and they can reach $20,000 or more per year.

Will I ever get regular rates again?

If you need facility insurance, you can eventually get regular car insurance rates if you have no more incidents or infractions. As items fall off your driving and insurance record with time, regular policies and their corresponding regular rates will become available to you again.

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