Insurance coverage

Winter Tire Discount 101

This October, the Ministry of Finance issued a statement confirming 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.

You and your clients might have questions on implementation and things like how much money will be discounted. Take this opportunity to connect and help clarify some of the uncertainty that might arise surrounding the new initiative.

Are all discount amounts the same?
The actual discount is up to the insurance company, but regulators approve them – we’ve seen ranges from 2% to 5%. Some insurers will offer the discount only at certain times throughout the year. Each insurer is different so if there’s ambiguity within your office, reach out to your insurance markets for clarification.

What is your role as a broker to police your clients’ use/installation of winter tires?
While each company has communicated different requirements, it appears most companies are taking an honour system approach. Just like any other discount brokers verify, let documentation and data integrity be your guiding principal. While there’s no indication insurers are looking to micromanage their brokers’ documentation practices, we suggest you gather proof of winter tire installation up front so you’re protected in the instance of a claim dispute. 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

Is there E&O exposure if your client says they have winter tires, but don’t?
Under the statutory conditions, an insurance company could void your client’s policy for misrepresentation, but they’d more likely re-rate the policy and chargeback the additional premium to the consumer.

Do brokers need to ask clients about winter tires every year, or is it a one-time thing?
While communication isn’t mandated, it’s good practice to connect with clients multiple times throughout the year. This is a great opportunity to do so.

Is a mass mailing to clients required?
Winter tires are not mandated (the discount is optional) so there’s no required communication you must send. The initiative is designed to incent consumers to use winter tires and improve road safety during winter months. But as mentioned above, this is a great opportunity to touch base with clients and highlight safety and cost-saving measures.

The media references a 5% discount, which isn’t true for all Ontarians. How can you manage your clients’ expectations?
Suggested messaging includes:

* Not everyone is guaranteed to see a 5% discount.
* Despite what’s been said in the media, the winter tire discount ranges from 2% – 5%; this percentage depends on the company you’re insured by.
* The winter tire discount was added to incent drivers to install winter tires and improve road safety in winter months; we look forward to a winter with reduced collisions, both in frequency and severity.




by Alan Bailey

More of a question than a comment. Is the winter tire discount mandatory for commercial vehicles as well; more specifically for smaller type vehicles but also in general for all commercially rated vehicles?

November 11 | 08:54

    by IBAO

    While the discount is mandatory for insurance companies to provide, it’s optional from a consumer point of view. Regarding commercial vehicles, insurance companies have to offer the discount on Individually Rated Commercial Automobiles (IRCA), but not on fleet policies. Thanks for the question!

    November 11 | 15:30

      by DR

      I have spoken to 2 different insurance companies that have advised me, that the Winter Tire Discount will not apply to Commercial vehicles….., that it is for private passenger only.

      November 16 | 15:50

Good info and helpful. It is too bad that the carriers are not all doing it the same way with respect to when the tires are required to be on the vehicle and whether they will add the discount mid-term. etc. It does create a marketing opportunity for us however, which is good
One point of clarity though in the content here. I don’t believe the company would be able to void the policy for misrep. I believe the criteria for “voiding” requires that the company would not have written the risk if they had been aware of the material difference in the risk in the first place. I believe they could current date cancel for non-disclosure of the material change, but I question if they would be permitted to void if challenged
Regardless, thanks for putting something up as I’m sure lots of brokers are still gathering data on this one as it closes in on us!

November 11 | 10:51

    by IBAO

    Thanks for your comments Derek. Re voiding policies, the information within this post was gathered from company reps, all of whom were on the same page (i.e. potential to void for misrepresentation). Definitely lots of opportunity here for brokers!

    November 11 | 15:54

by Jessica

Do you know if the discount will be effective for everyone Januar 2015 or do they have to wait for the renewal and then add it? For example, if a client’s policy renews Dec 2015, do we have to wait until their next renewal, or can we add the discount mid term eff January when the discount becomes available???? Please let me know. Thanks!

November 11 | 15:46

    by IBAO

    If a client’s policy renews Dec 2015, you’d have to wait until the discount comes into effect Jan 2016. Otherwise, it’ll depend on the company when they roll it out (i.e. some will roll out at renewal). Hope this helps!

    November 11 | 16:15

by JD

Hi, question – since the data clearly shows that winter tires help reduce the number of accidents in winter driving, why wasn’t this rolled out in November when it starts snowing in Northern Ontario – why wait until basically the middle of winter? Or why haven’t all of the companies rolled it out last year, or the year before? This data isn’t new and many drivers don’t have enough experience driving an automobile in the summer let alone when the driving conditions are poorest. Wouldn’t insurance companies want as many of their clients as possible driving with winter tires and incent them to do so? If I was ‘an insurance company’, and I wanted to reduce claims and maximize profits, I’m going to incent my clients to put winter tires on their cars by giving them a reason to do so. It just doesn’t make any sense.

Just curious after reading the article/comments… Thanks!

November 12 | 09:34

    by IBAO

    Thanks JD. The discount was mandated by the Ontario Government as one of several initiatives to drive down the cost of auto insurance in Ontario. It was formally announced in April (part of the provincial budget announcement) and January was the deadline provided to insurance companies.

    November 12 | 11:28

by Pat

It’s too bad the discount given for winter tires wasn’t a little more & it would make it easier for brokers if all companies were regulated to give the same discount. My four winter tires cost me around $1,000 and the discount only saved me $8 in premium (half the policy term). I guess $8 is better than nothing and the safety feature of winter tires somewhat makes up for the difference.

November 12 | 15:22

by Carrie Shouldice

Hi – in regards to your comment about IRCA policies, I have contacted a few of our companies and asked them to comment on that. All came back that the discount only applies to private passenger vehicles. I directed them to this site and the comment about commercial vehicles. One company came back with:
Ontario Regulation 664 (Automobile Insurance)
This regulation has been amended to require that all insurers offer a discount to policyholders for the use of winter tires. The winter tire discount must be made available for contracts issued or renewed on or after Jan 1 16, for all eligible private passenter automobile policies.
Can you provide documentation showing that this also applies to IRCA policies so I can forward it to them.
Thank you.

November 12 | 17:20

    by IBAO

    Carrie and DR – thank you both for your comments. You’re correct. Contrary to an earlier response, only private passenger vehicles receive the winter tire discount. Thanks for prompting the clarification!

    November 17 | 10:50

by Davee3

Curious – what period of the year are the winter tires supposed to be on the car to qualify . Truly nuts that the discount starts in my case when I take them off. What if the winter tires are worn to the point of being worse than my allweather tires

February 7 | 16:33

    by IBAO

    Thanks for your question. The winter tire discount in Ontario is at the discretion of insurance companies to enforce (unlike Quebec where there’s a law requiring installation between Dec 15th – March 15th). There are no requirements in terms of the age and amount of wear on the tires. As far as timing, we recommend connecting directly with your insurance company.

    February 9 | 12:04

by tnt

Why am I only finding about this discount for winter tires now? I only came to this site because I received a letter from my Insurance company informing me that there would be changes to the Ontario Auto Insurance to give more choices to take effect June 1, 2016. As I was not aware of any changes to be made I came to this web site as it was included at the bottom of the notice “for general information about changes to auto insurance in Ontario, contact”.

April 1 | 17:42

    by IBAO

    Thanks for your comment. The winter tire discount was announced in 2014 by the Ontario Government as part of their commitment to reduce insurance premiums. Your insurance broker would be the best source of information on this – they can highlight safety and cost-saving measures. Reach out to us at, we’d be happy to connect you.

    April 4 | 12:05

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