When auto insurance became mandatory for drivers in Canada, especially the province of Ontario, the government required drivers to purchase Auto Insurance from either a private company or a government entity. The government specified the types of minimum coverages needed and the penalties for driving without them. In some provinces, car insurance provided through the government, so there is no issue. However, this is not the case in Ontario, as private companies entirely produce it. Most drivers obtain coverage through any specific insurance company that they can find the right price and coverage. However, some drivers may have difficulty, as they are too high risk, which means that they may have trouble finding insurance from private companies.
Most private companies won’t want to sell private insurance to individuals that require high risk auto insurance in Ontario without increasing the price of the coverage considerably. The insurance industry has recognized that auto insurance has to be available for any licensed driver regardless of how dangerous they may be deemed to be. That’s why specific programs such as the facility association exist for auto insurance to be available for risky drivers and at the same time, share the risks equitably among all drivers.
The Facility Association is an unincorporated nonprofit association of insurance companies that provide auto insurance for drivers who might not be able to find insurance coverage through reasonable means. Individual companies designated as servicing carriers, and they issue insurance policies and handle claims on behalf of the insurance association. Insurance companies not designed are referred to as non-servicing carriers. They are not involved in the day to day operations but are still full members of the association.