10/18/2023
Why clients get dropped from their auto policies without knowing
from Canadian Underwriter October 17, 2023 by Alyssa DiSabatino
Drivers used to get a reminder in the mail that their license or plate renewal is approaching. But in 2022, the Ontario government stopped mailing out physical notices for expiring licenses.
Some drivers didn’t get the memo.
Mitch Insurance is seeing an increase in policy non-renewals from clients whose licenses expired without their knowledge.
“We’re seeing now that about 30% of our non-renewals are due to somebody’s license being expired and they forgot to renew it,” Cassie Gilroy, retention manager at Mitch Insurance told Canadian Underwriter.
Gilroy says she’s never seen this volume of non-renewals due to license expiration before.
“We used to get the odd one here and there; they’d pop up infrequently.”
This means some drivers are only realizing their license has expired when they’ve received notice of non-renewal on their auto insurance policy.
Trouble arises if a driver gets pulled over and ticketed for driving without a valid license, or if they’re involved in an accident without insurance coverage.
It could result in higher auto premiums.
The good news is, it’s a straightforward process for customers to get their licenses reinstated upon suspension.
“The majority of the time, clients are able to go to the MTO and get their license reinstated. Then they just provide us with proof that they’ve done that, and they get their renewal issued,” Gilroy said. “If that happens, there are no pricing implications.”
She finds most drivers are able to get their license reinstated and fight the ticket.
But if a license lapsed for a long enough period before the driver renewed it, they might be required to retake their test. Then, they’d have to once again pay new driver premiums on their insurance policy.
Since physical renewal notices were dropped in the province, brokers are bearing the brunt of the problem.
“[It] has increased the number of negative interactions we’re having with our clients, because nobody wants to get a phone call, or an email or a letter, saying that you’re not driving with a valid license right now,” Gilroy said.
Luckily, brokerages can get ahead of the problem by reminding clients to check their license expiration at the same time they receive their renewal notice. This causes fewer insurance hiccups, should a client find their license is due for renewal.
“We recently have started sending a reminder email out to our clients a few months in advance, to give them some time to go and get their licenses renewed, so that they don’t find themselves in that position.”
Drivers can also sign up on the Service Ontario website to receive email, text or phone renewal reminders for their driver’s license or plate.
