With the provincial election less than a month away, the four major parties are in the process of releasing their respective platforms. One issue that impacts a significant number of Ontario residents and has received a disappointing level of attention is automobile insurance.
Ontario drivers are some of the safest in North America. Unfortunately, we also pay some of the highest insurance premiums.
So far, we have heard a few things from the Conservative Party and the New Democratic Party. The Liberal Party and the Green Party have not released any plans to date.
The Conservative Party has provided the most detail, noting that they intend to provide “more options” to Ontario drivers. Unfortunately, no specifics have been provided as to how they intend to achieve this goal. The Conservative Party has also emphasized the need for greater clarity from the insurance industry and intend to impose more supervision of insurance through a new Financial Services Regulatory Authority rule that helps define unfair or deceptive practices. While the Conservative Party’s approach to lowering premiums lacks detail, it is nevertheless encouraging to see a focus on greater transparency from the insurance industry.
The New Democratic Party has also provided some modest detail as to what they have planned for Ontario’s insurance industry. They are seeking to ban postal code “discrimination”, to explore every avenue for bringing down insurance rates, and to enforce greater transparency from insurers. The NDP recently stated that they would lower premiums by 40% across the province and would impose an 18 month freeze on premium increases. A commission would also be created and tasked with exploring options to improve efficiency in the insurance industry. The NDP have said that they would consider changing to a new system which included both public and private insurance regimes. Like the Conservative Party, the New Democratic Party has yet to provide any specifics as to how they intend to achieve these goals.
While the lack of detail is a tad disconcerting, it is encouraging to see these pledges from the Conservative and New Democratic parties. How insurers in Ontario calculate their premiums remains a mystery to many resident of Ontario and increased oversight might help bridge this gap in understanding.
During the COVID pandemic, insurers took in record profits due to the reduced number of drivers on the road and corresponding reduction in auto claims. However, despite paying substantially fewer claims and taking in more than $3,630,000,000.00 in profits, auto insurers increased their premiums by $198,000,000.00 in 2020. There is clearly a need for greater oversight of the insurance industry and Ontario drivers deserve to know where their premiums are going. Hopefully, whoever wins in the upcoming June election makes this a priority moving forward.
However, we should also be mindful of the fact that when insurers are forced to lower their premiums, it is often the insured who pays the price through reduced levels of coverage. While we all want lower premiums, they should not come at the expense of coverage. Insurers have enjoyed an unmitigated windfall over the past two years and it is time that some of those profits are put toward the drivers in Ontario.
About the Authors
Nick understands that those who have suffered through the trauma of a serious personal injury are already in a position of vulnerability, and is committed to helping them through this difficult process, offering the support and advice they need. Specifically, he seeks to help right the balance in an insurance system that is becoming increasingly antagonistic toward injured individuals.