A car dirivng down a snowy road during winter weatherIn October of 2015, the Ministry of Finance issued a statement confirming that all insurance companies including the Facility Association are required to provide a winter tire discount as of January 1, 2016. This was mandated by the Ontario Government in 2014 as part of their commitment to reduce insurance premiums.

So how does this program work? What kind of discounts can you expect if you install winter tires? Read on…

No two discounts are created equal.

The actual discount that car owners are entitled to is up to discretion of each insurance company. Regulators approve the discounts, which can range from from 2% to 5% on your annual premium. In some cases, insurers will offer the discount only at certain times throughout the year.

Because each insurer will apply this discount differently, it is important that you speak with your broker to clarify your situation.

What will you need to prove use/installation of winter tires?

Similar to the disparity in discount amounts, insurance companies also have different requirements. At this point, it appears most companies will be taking an honour system approach, but be prepared to produce documentation.

Before applying to your broker for this discount, we suggest you gather proof of winter tire installation up front so you’re prepared when/if they require it. Proof of winter tire installation could include:

* A picture of winter tires on the vehicle
* A purchase receipt for the tires
* A purchase receipt for installation
* Documentation validating verbal confirmation from your clients that they have winter tires on their vehicle

Cheaters never prosper?

It may be tempting to try and sneak this discount in and not actually purchase the tires. Even if your broker does not request proof from you, you are under obligation to be truthful in your policy application. Under the statutory conditions, the insurance company (not your broker) could void your policy for misrepresentation. While voiding the policy is entirely possible, it is more likely that the company will re-rate your policy and chargeback the additional premium to you.

No one wants to pay more than they have to, so take advantage of this new discount to not only save some money on your policy, but also improve your driving safety this winter!

Contact us if you have any questions about this or any other insurance matter.