Ont. chang­ing auto in­sur­ance sys­tem

Prov­ince aim­ing to tackle fraud, lower rates

The Recorder & Times (Brockville) - - ONTARIO NEWS - SHAWN JEF­FORDS

TORONTO — On­tario is crack­ing down on what it calls ram­pant auto in­sur­ance fraud, say­ing it will lead to rate cuts for the prov­ince’s 10 mil­lion driv­ers.

Auto in­sur­ance rates are a thorny is­sue for the Lib­eral gov­ern­ment, which is still try­ing to de­liver on a prom­ise it made to cut rates by 15 per cent on av­er­age from 2013 lev­els.

The gov­ern­ment said Tues­day that it will de­velop stan­dard treat­ment plans for com­mon col­li­sion in­juries such as sprains and whiplash, cre­ate in­de­pen­dent and neu­tral ex­am­i­na­tion cen­tres to pro­vide med­i­cal as­sess­ments for more se­ri­ous in­juries, and en­sure that con­tin­gency fees set by lawyers are fair and trans­par­ent.

The plan would also es­tab­lish a Se­ri­ous Fraud Of­fice, staffed in part by of­fi­cers from the On­tario Pro­vin­cial Po­lice, to tackle abuse in the sys­tem.

Fi­nance Min­is­ter Charles Sousa, who an­nounced the mea­sures with At­tor­ney Gen­eral Yasir Naqvi, said the cost of auto in­sur­ance fraud is es­ti­mated to be as high as $1.6 bil­lion a year. By crack­ing down on abuse, and hold­ing peo­ple ac­count­able, the gov­ern­ment can achieve a “sub­stan­tive rate re­duc­tion,” he said.

“Auto in­sur­ance fraud has be­come an in­dus­try,” Sousa said. “It’s time to stop it. If you know some­one who has been en­gaged in this crime let the Se­ri­ous Fraud Of­fice know. They will pur­sue and in­ves­ti­gate these fraud­sters and bring them to jus­tice.”

Sousa said the new mea­sures will en­sure ac­ci­dent vic­tims re­ceive ap­pro­pri­ate care and are as­sessed in­de­pen­dently by health pro­fes­sion­als with no ties to an in­surer. He could not im­me­di­ately say what the plan will cost tax­pay­ers or if it sets a spe­cific rate re­duc­tion tar­get.

Sousa also urged in­sur­ance firms to take ac­tion against fraud­sters.

“If an in­sur­ance com­pany, if the in­dus­try is telling us that there’s abuse, there’s fraud in the sys­tem, then stop set­tling,” he said. “Stop set­tling fraud cases and let’s start at­tack­ing the fraud and prose­cut­ing the crime.”

A gov­ern­ment-com­mis­sioned re­port ear­lier this year found that On­tario has the most ex­pen­sive auto in­sur­ance premi­ums in Canada de­spite also hav­ing one of the low­est lev­els of ac­ci­dents and fa­tal­i­ties.

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, the re­port 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, it said.

Tues­day ’s an­nounce­ment comes as the Lib­eral gov­ern­ment is still try­ing to ful­fil a prom­ise to re­duce rates by 15 per cent on av­er­age from 2013 lev­els — rates have now de­creased on av­er­age by about eight per cent since then. The gov­ern­ment missed its self-im­posed dead­line of Au­gust 2015 to hit that tar­get and Pre­mier Kath­leen Wynne has ad­mit­ted that was a “stretch goal.”

In­sur­ance com­pany Aviva Canada said if the gov­ern­ment im­ple­ments its new mea­sures, it will help lower rates. The com­pany es­ti­mates fraud costs the in­sur­ance sys­tem $2 bil­lion a year, nearly half a mil­lion more than the gov­ern­ment es­ti­mates, said vi­cepres­i­dent Gord Ras­bach.

“If you ad­dress the fraud piece you will make an im­pact on rates,” he said. “Fraud, at the end of the day, some­one has to pay for it. It re­ally comes down to peo­ple who are milk­ing the sys­tem (at the ex­pense) of a lot more peo­ple who are pay­ing and are hon­est.”

The op­po­si­tion Pro­gres­sive Con­ser­va­tives said the Lib­er­als are only act­ing on in­sur­ance rates now be­cause an elec­tion is less than six months away.

“Auto in­sur­ance premi­ums are still 55 per cent higher than other Cana­dian ju­ris­dic­tions,” PC fi­nance critic Vic Fedeli said. “Four years ago this gov­ern­ment promised a 15 per cent cut ... They have com­pletely bun­gled this file.”

NDP fi­nance critic John Van­thof, who noted the gov­ern­ment plan to cut rates doesn’t set a tar­get, was doubt­ful the plan will re­sult in a re­duc­tion of costs for On­tario driv­ers.

“They ac­tu­ally haven’t talked about how much their new stretch goal for in­sur­ance go­ing down (is),” he said.

“They ’ve talked about mea­sures they want to take but there is no back-up doc­u­men­ta­tion for that.”

THE CANA­DIAN PRESS FILES

On­tario Fi­nance Min­is­ter Charles Sousa says the cost of auto in­sur­ance fraud is es­ti­mated to be as high as $1.6 bil­lion a year. On­tar­i­ans pay the high­est price for auto in­sur­ance in Canada, de­spite hav­ing a low level of ac­ci­dents.

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