When people think of high-risk drivers, they often picture thrill-seekers with a need for speed or those with a record of accidents and traffic violations. The reality, however, is far more complex. A significant portion of high-risk drivers in Canada are not reckless drivers at all — they’re individuals who have struggled to keep up with rising insurance premiums.
For three consecutive years, nearly 10,000 Canadian drivers annually have been classified as high-risk, not because of dangerous driving, but due to missed or unpaid insurance payments. This financial hardship can lead to cancelled policies, forcing these drivers into the high-risk category and facing significantly higher premiums when seeking new insurance.
Sam Pirrera, vice president of Personal Risk at NFP, an Aon company, explains the challenge
“High-risk doesn’t always mean high claims or infractions,” he says. “In many cases, it’s just about affordability. When someone misses multiple payments, their policy may be cancelled, which stays on their record for three years. That creates a ripple effect, making it harder for them to get affordable coverage.”
Why unpaid premiums matter
Insurance companies take missed payments seriously because they are often associated with a higher likelihood of claims, even for minor issues like windshield damage.
“It’s not just about the missed payment,” says Carole Reynolds, team lead with NFP’s Personal Risk division. “Carriers see a pattern where people who don’t pay premiums on time are statistically more likely to make claims, which increases costs for everyone.”
Most insurers allow up to three missed payments within a policy term before cancellation, although Reynolds says more are decreasing their tolerance to two. NFP’s brokers can help find standard insurance options for people with one policy cancelled due to nonpayment. Once a policy is cancelled two or three times, however, the individual is flagged as high-risk, leading to premiums that are 35% to 69% higher than average — and in some cases, up to 84% higher. This financial strain can result in drivers opting to go without insurance entirely, a dangerous decision that puts approximately 400,000 uninsured vehicles on Ontario roads.
Breaking the cycle
Despite these challenges, experts like Pirrera and Reynolds emphasize that being labeled high-risk doesn’t have to be permanent. Education and proactive measures can help drivers regain their footing.
“One of the most important things we do is educate clients,” says Reynolds. “If someone has struggled with payments, we help them understand the consequences and provide tools to stay on track. For instance, scheduling autopayments on payday or setting payment dates when funds are more available — like around government benefit deposits — can make a big difference.”
NFP’s Easyway Insurance Brokers is a program designed to guide high-risk drivers back toward affordability. “We work with clients to manage payment issues and avoid further infractions,” Pirrera explains. “If it’s strictly a payment issue, we can often help them rebuild over time. But it’s crucial to avoid tickets or accidents during that period, as those only compound the problem.”
Affordable coverage starts with smart choices
To prevent financial strain, Reynolds suggests making careful decisions about vehicle purchases and coverage. “Before buying a car, ensure you can afford the insurance. Sometimes opting for an older, less expensive vehicle is a smarter choice.”
Additionally, usage-based insurance programs can offer discounts for safe driving habits. However, these programs also monitor driving behaviors, so they may not be suitable for everyone.
Ultimately, tackling the affordability crisis in auto insurance is about more than just keeping up with payments — it’s about creating a system that works for everyone on the road.
“Every driver needs insurance, but the current system doesn’t always account for how challenging it can be to stay on top of premiums,” Pirrera says. “We’re here to help clients navigate those challenges and get back to a place of financial security.”