On­tario pays Canada’s top car in­sur­ance pre­mi­ums

Province’s in­sur­ance sys­tem among prici­est, least ef­fec­tive in the na­tion, ad­viser re­ports

The Observer (Sarnia) - - NEWS - AL­LI­SON JONES

TORONTO — On­tario has the most ex­pen­sive auto in­sur­ance pre­mi­ums in Canada de­spite also hav­ing one of the low­est lev­els of ac­ci­dents and fa­tal­i­ties, a re­port has found.

“While the num­ber of au­to­mo­bile ac­ci­dents in On­tario — es­pe­cially very se­ri­ous ones — have con­sis­tently come down, the cost of claims has con­sis­tently gone up. On­tario also has one of the least ef­fec­tive in­sur­ance sys­tems in Canada,” said the re­port by David Mar­shall, On­tario’s auto in­sur­ance ad­viser.

The av­er­age auto in­sur­ance pre­mium in On­tario is $1,458, which is al­most 55 per cent higher than the av­er­age of all other Cana­dian ju­ris­dic­tions, Mar­shall found. If On­tario’s pre­mi­ums were closer to the Cana­dian av­er­age of about $930, it would save On­tario driv­ers al­most 40 per cent — or about $4 bil­lion a year, he wrote.

The prob­lems in the sys­tem are struc­tural, Mar­shall wrote, not ex­cess in­sur­ance com­pany prof­its or the be­hav­iour of claimants or lawyers.

“While On­tario’s ben­e­fits, tak­ing into ac­count both the no-fault and tort por­tions are, on the whole, fair, they are not be­ing fairly de­liv­ered,” he wrote.

“The main cause is that the sys­tem does not pro­mote a timely, con­flict-free means of de­cid­ing what care is needed and pro­vid­ing it to ac­ci­dent vic­tims.”

The sys­tem favours cash set­tle­ments in lieu of care, Mar­shall found. Sprains and strains — the ma­jor­ity of claims — of­ten take more than a year to set­tle and about one-third of over­all ben­e­fit costs goes to­ward com­pet­ing ex­pert opin­ions, lawyers’ fees and in­surer costs to de­fend claims in­stead of go­ing to treat­ment, he wrote.

Mar­shall’s rec­om­men­da­tions in­clude adopt­ing a “care not cash” ap­proach, ex­plor­ing bet­ter ways to care for peo­ple who are cat­a­stroph­i­cally in­jured, mak­ing lawyers’ con­tin­gency fees more trans­par­ent.

The gov­ern­ment says it will con­sult with stake­hold­ers on the rec­om­men­da­tions.

It al­ready has low­ered the max­i­mum in­ter­est rate that an in­surer can charge for monthly auto pre­mium pay­ments, pro­hib­ited mi­nor at-fault ac­ci­dents from boost­ing pre­mi­ums and in­tro­duced a win­ter tire dis­count.

The gov­ern­ment-com­mis­sioned re­port was qui­etly posted on­line last week to On­tario’s gov­ern­ment news re­lease site in a way that does not alert sub­scribers. A spokes­woman for Fi­nance Min­is­ter Charles Sousa said it was not is­sued as a news re­lease be­cause “there re­ally was no news to an­nounce.”

NDP deputy leader Jag­meet Singh said it looks like the gov­ern­ment was try­ing to “bury” the re­port.

In the past sev­eral years the gov­ern­ment has re­duced ben­e­fits, Singh said, such as re­duc­ing cov­er­age for cat­a­strophic in­juries from a max­i­mum of $2 mil­lion to $1 mil­lion.

“Ev­ery change has sys­tem­at­i­cally cut the cov­er­age that On­tar­i­ans re­ceive and ben­e­fited not the peo­ple but in­sur­ance com­pa­nies,” he said.

A spokesper­son for the In­sur­ance Bureau of Canada said it is re­view­ing the re­port.

“We’ve said in the past and con­tinue to say that we pay too much for in­sur­ance (in On­tario),” said Steve Kee.

“Claims are higher here than any­where else in the coun­try so I think this re­port should be a cat­a­lyst to bring us to­gether — the in­dus­try, the gov­ern­ment, the stake­hold­ers, to en­sure that we do what­ever is nec­es­sary to de­liver the best sys­tem for On­tario driv­ers.”

The re­port comes as the Lib­eral gov­ern­ment is still try­ing to ful­fil a prom­ise to re­duce rates by 15 per cent on av­er­age from 2013 lev­els.

The gov­ern­ment missed its self­im­posed dead­line of Au­gust 2015 to hit that tar­get and Pre­mier Kath­leen Wynne has ad­mit­ted that was a “stretch goal.”

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