Ontario News Highlight for October 25: Auto Insurance Rates Rise Despite Liberal Promise to Reduce Rates 15%
Auto insurance rates have increased 2 straight quarters in Ontario, moving the Liberal government even further away from a legal target of an average 15-per-cent reduction.
In legislation and in supporting regulations finalized in August, 2013, the Liberals committed to cutting auto insurance premiums an average of 15 per cent by August 2015.
Approved rates in the third quarter of 2016 increased by an average of 1.5 per cent, according to the Financial Services Commission of Ontario (FSCO).
That reduces the average decrease since August 2013 — which at one point was over 10 per cent — back down to about 8.35 per cent, or a little over halfway to the legislated goal.
The 2013 legislation to implement the 15% premium reduction reflected pressures on the Liberal government following the release of statistics showing that the insurance industry cut its no-fault accident benefits payments in half in 2011 compared to 2010, due to government changes in the accident benefit schedule in 2010.
Increasingly, knowledgeable auto insurance observers believe that rates under Ontario’s staggeringly complex auto insurance system will remain high until there is a complete overhaul of the system.
For example, Willie Handler, a former senior auto insurance policy advisor with the Ontario Government, now believes that the no-fault, statutory accident benefits side of the system should be administered by a public, Crown corporation. In an article posted last year, Handler says that a “A made-in-Ontario solution should include private insurance companies continuing to provide third-party liability coverage and physical damage (car repair) coverage, while the government creates a not-for profit Crown corporation to deliver accident benefits”. In Ontario, statutory accident benefits cover everything from a few days treatment for minor strains to so-called “Catastrophic” benefits which often involve long-term income replacement benefits due to incapacitating injuries suffered in a serious accident.
Handler goes on to say that “A single adjudicative body would introduce significant efficiencies, standardize claims practices and eliminate the adversarial nature of the product”.
More on Ontario auto insurance reform in an upcoming Canada Fact Check feature post.
Projected Ontario Legislative Business for Tuesday, Oct. 25
Main Chamber Business
- 9:00 a.m. – Second Reading debate resumes on Bill 7, An Act to amend or repeal various Acts with respect to housing and planning
10:45 a.m. – Question Period. Watch Live!
- 3:15 p.m. – Debate on Conservative Opposition Day Motion on Hydro prices. Watch Live!
Ontario Legislature Committee meetings for Tuesday, Oct. 25
- 9:00 a.m. – The Standing Committee on Estimates will meet to review the 2016-2017 Estimates of the Ministry of Energy. The Minister of Energy, Glenn Thibeault will take tough questions from Opposition Members on electricity prices. Watch live!
- 3:45 p.m. – The Standing Committee on Estimates will meet to review the 2016-2017 Estimates of the Ministry of Agriculture, Food and Rural Affairs. Watch live!