TORONTO: The Financial Services Regulatory Authority of Ontario (FSRA) has approved several auto insurance rate adjustments for the year, which means drivers in the province could pay as much as 11% more for coverage.
The FSRA has approved the rate increases of some 21 insurers. According to the regulator, “approved rates will increase on average by 1.56% when applied across the total market”.
FSRA said on their website that some insurers have been approved an increase of just over 11% and others by 10% and that this compares to an increase of 2.60 per cent on average for rate changes approved in the third quarter of 2019.
Tom Rakocevic, Ontario NDP Auto Insurance critic said in response to the hike: “It’s wrong for the Ford government to let auto insurers pile on with another rate hike as Ontario drivers struggle to keep up with skyrocketing auto insurance rates.
“Adding insult to injury, Doug Ford campaigned on lowering auto insurance rates and he’s turned around and done the exact opposite, driving premiums up and up. This confirms that there is no relief in sight for Ontarians as Doug Ford’s Conservatives pick up where the Liberals left off.”.
The rate change shown for each insurance company is the average
\ for that company, based on all the drivers it insures, FSRA said.
Meanwhile, a new report released on February 13 provides alarming new data on just how unfair Ontario’s auto insurance system is. The report by York University Schulich School of Business Professor Dr. Fred Lazar reveals that Ontario drivers continue to pay excessive auto insurance premiums in Ontario while insurers rack up billion dollar profits.
Focusing on the top-ten insurance companies in Ontario in particular, Lazar finds that their profitability was higher than their Canada-wide businesses for each of the last three years!
“The auto insurance premiums in the province of Ontario are helping subsidize the rest of the insurance industry around the country. This is just not fair to Ontario drivers,” said Ontario Trial Lawyers Association President Allen Wynperle.
“Under the previous Ontario government, benefits were cut 17 times. It was supposed to reduce premiums, but premiums have not gone down.” said Wynperle. “And now, the regulator has approved the ninth consecutive increase totaling 20% over the last three years. It just doesn’t make sense,” Wynperle added.
FERA says on their site that an individual policyholder may experience a rate change that is either higher or lower than the industry-wide average rate change, or the average rate change for a particular insurer, depending on several factors, such as:
• the vehicle insured;
• where the Insured lives;
• driving experience;
• at-fault accident and conviction history of drivers;
• whether the vehicle is used for pleasure or commuting; and
• choices made by the policyholder on coverages purchased and deductible or liability limits.
Also, as most policyholders purchase annual policies, any changes approved for the insurer and effective prior to the policy renewal date, or changes in the policyholder’s circumstances sin-ce their last renewal (e.g., at-fault accidents, driving convictions), will impact the policyholder’s rate at renewal.
Citing data from the Insurance Bureau of Canada, CBC News reported that Ontario has one of the lowest accident and death rates in the country, but the province’s average cost of auto insurance is among the highest in Canada.
Auto insurance rates in Ontario are increasing by as much as 11 per cent this year, despite promises from the Ford government to reduce premiums, CBC News said.
Major reform of the auto insurance system was promised by the Ontario government in April 2019 when its first budget was tabled.
It was stated at the time that the changes would be aimed at increasing the range of plans available to drivers, making the claim process easier to navigate, and creating more competition between insurance providers.
There was no specific plan to reduce premiums but then finance minister Vic Fedeli called the proposal “transformative” at the time.
Ontario is repoted to have the second highest average cost of auto insurance ringing in at $1,505. All other provinces and territories are way behind Ontario, except for British Columbia, which has an average premium of $1,832, although auto insurance in that province is run by the provincial government.
Quebec has the lowest insurance costs, the amount averaging at $717, according to the IBC.
The Ontario Trial Lawyers Association is calling for greater transparency and clear reporting of the profits enjoyed by the automobile insurance industry.