How a Letter of Experience May Help You Save on Auto Insurance

When it comes to shopping for car insurance, the insurance company you apply to must have the correct information about you it needs to give you the lowest possible rate.

Insurance companies look at a broad range of information when assessing what your rate should be. But if they cannot get your full driving history, or some of the details they have are incorrect, it can affect how high your auto insurance premium is. For instance, if you weren’t the primary driver on a policy despite being previously insured. Should that happen, you will need to provide them with what’s known as a letter of experience.

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What Is a Letter of Experience?

A letter of experience is a document from your former insurer that confirms the information you've provided about your driving and insurance history. Your new auto insurer may ask you for one, or you can request one from your former insurer to use while getting multiple quotes. If you have switched insurers several times, you may need letters from each of the previous providers that insured you.

There's a lot that goes into an insurer’s calculations when determining an auto rate like where you live, your driving record, the car you drive and your insurance history. Your insurance history plays a significant role, and insurers consider the following factors when calculating your premium:

  • Any previous cancellations made by an insurer for non-payment
  • Collisions
  • Claims history
  • Length of time you have been continuously insured
  • Records of your past policies within the province

When Might I Be Asked to Provide a Letter of Experience?

There are multiple situations where a broker or agent will request that you provide a letter of experience:

  • If you recently changed provinces or immigrated to Canada. If you have recently moved from one province to another or immigrated to Canada from another country, you will likely need to get an experience letter from your former insurer. If you moved from one province to another, your driving and insurance history will typically carry-over into your new home province. If you're coming from another country, it's possible your driving and insurance history will be credited.

If you don't already have a letter to share, contact your previous broker or agent so they can assist you in getting one. A letter of experience will provide them with that information if they're unable to access it through a public database. Generally, brokers and agents only have access to driving records and insurance history in the regions for which they are licensed.

  • Commercial driving history. If you were insured on a company car insurance policy (often referred to as a fleet policy), it might not be in your insurance history. If that happens, contact the fleet car insurance provider you were under so your new company can review the history and use that experience when calculating your premiums.
  • Problems or discrepancies. If the driving history you provide is not consistent with what is recorded in your insurance history, a letter of experience may help. Sometimes insurance companies make mistakes, and they could be added to your insurance history. You can find out if there are any discrepancies by getting a copy of your driving history.

In Ontario, there are different types of driving records you can access, with some restrictions, and fees are applicable. For instance, you can request an uncertified copy of your driver’s licence history upon completing a driving-education course for $12 through ServiceOntario.

In other provinces like Alberta, motorists residing in that province can get a standard driver abstract after filling out an application and submitting it to ServiceAlberta. It costs around $28 for Albertans to obtain their personal driver’s abstracts.

What Is in a Letter of Experience?

A letter of experience will be written on the insurance company's letterhead, and will typically include the following details about your current, or previous policy:

  • The policy number
  • Who was on the policy
  • The start date and end date (if applicable)
  • The name of the driver requesting the letter
  • The claims reported or paid against the policy
  • Details on why the policy ended

Though an experience letter doesn’t guarantee a lower premium, if needed, it may help you clear up any discrepancies or help you get credit for your experience behind the wheel when shopping for a lower auto rate.

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