Can the officer do that? I immediately went home and found my valid insurance document and it is now in the car. I want to proceed with option 3 on the ticket and bring my valid insurance card with me on the trial date...how can i proceed with this and also was the officer in the wrong by keeping my insurance documents?
You were charged with not surrendering that particular valid document when prompted. You were not charged for driving without insurance.
If it's paired with another charge, it's a lot easier to have it dropped if you plead guilty to the other. If it's the only ticket you received, it's just not as easy. It doesn't hurt to try though.
Even if you proceeded to trial and paraded your valid insurance card to the courts, you would still be found guilty for failing to surrender your insurance card to the officer. Justice of Peace most likely will hand you a suspended sentence $0 fine. However, the conviction will still on be on your driving record, your insurance company can use it to add surcharges to your insurance premium.Offence
(3) Every owner or lessee of a motor vehicle who,
(a) contravenes subsection (1) of this section or subsection 13 (11); or
(b) surrenders an insurance card for inspection to a police officer, when requested to do so, purporting to show that the motor vehicle is insured under a contract of automobile insurance when the motor vehicle is not so insured,
In my opinion, your best choice is to choose the early resolution option and show the prosecutor your insurance card and beg them to drop it. If they don't do it, ask for trial and request disclosure and go that route. It just gives you more opportunities to get this charge dropped.
This is a very simple charge for the prosecutor to get a conviction.
I also recommend reviewing the ticket and making sure there are no fatal errors: http://www.ontariohighwaytrafficact.com/topic1965.html