Driving without Insurance

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The topics in the Dial-A-Law series provide general information on a wide variety of legal issues in the Province of Alberta. This service is provided by Calgary Legal Guidance funded in part by the Alberta Law Foundation.

This topic will discuss the consequences of driving your vehicle without insurance. In Alberta, you must have a minimum amount of insurance on your vehicle. The minimum amount is called Public Liability and Property Damage, or PLPD insurance. It is your duty as a driver to make sure any vehicle you drive is insured. If the vehicle is not yours, ask the owner to show you proof of insurance or a pink card before you drive it. Make sure the insurance is valid.

If you purchase a vehicle, you must insure it before you drive it off the lot. There is no grace period for obtaining insurance. You cannot transfer your insurance from your old vehicle to your new vehicle by simply transferring the license plate. You must make the proper arrangement for insurance with your insurance company. Make sure that the insurance is in effect before you drive it any place.

Your insurance company should always have your current address. If your insurance is cancelled for any reason, the insurance company must send you a registered letter to the address on their file. If you have moved, you will not know that your insurance has been cancelled.

If your vehicle is uninsured and you drive or park it on any public or private road, alley or parking lot, you may be charged with “Driving without Insurance.” You will receive a fine of no less than $2,500 for a first offence and a mandatory jail term if you are charged a second time within 1 year.

If you are in a motor vehicle accident and it is your fault, you will be held personally responsible for damages suffered by the other party if you have no insurance on your vehicle. You will know that you are being sued personally by that injured party when you are served with a Statement of Claim. When you are served with a Statement of Claim you may want to hire a lawyer to assist you in a defence if you believe that the accident was not your fault.

The injured parties may also try to collect from the Alberta Motor Vehicle Accident Claims Fund. The fund is for injured parties to recover damages if they are in an accident with a driver who has no insurance on his vehicle. The fund is also for injured parties who are in a hit and run situation and the party does not know who to sue. The Alberta Motor Vehicle Accident Claims Fund has their own lawyers to defend against any claims made it. Generally, the plaintiff will notify the Motor Vehicle Accident Claims Fund when they find out you have no insurance on your vehicle.

You may also decide to ignore the Statement of Claim and allow the injured party’s lawyer to note you in default. The other party’s lawyer will then notify the Motor Vehicle Accident Claims Fund and the Fund’s lawyers will take over the defence of the action. The Fund’s lawyers will not keep you as informed about the legal proceedings as would be if you hired your own lawyer. The Fund’s lawyers do not represent you; they act for the Fund. They will not require your consent to settle a claim. You will be notified of legal proceedings by notices or information sent to you at the address listed on your driver’s licence. Keep your current address registered on your driver’s license.

If the Court finds that the accident was your fault, you must pay the injured party for damages as a result of the motor vehicle accident. The injured party may assign that judgment to the Motor Vehicles Accident Claims Fund. The Fund then pays that amount to the injured party and then the Alberta Motor Vehicles Accident Claims Fund will collect the judgment from you.

The Fund may collect the amount of money paid from you in several ways. The most effective way is to suspend your driver’s license until the amount is paid. If this happens, contact the Fund and try to negotiate reasonable monthly payments. If an agreement can be reached, your license will be reinstated as long as you make the regular monthly payments. If you cannot reach an agreement, apply to the Court and ask them to set an amount for the monthly payments to be made to the Fund.

If you declare bankruptcy as a result of the motor vehicle accident, the Bankruptcy Court may refuse to release you from that debt. Even if the bankruptcy is completed and you are discharged, your driver’s license can still be suspended by the Motor Vehicles Accident Claims Fund.