Insurance Rates on the Rise as Coverage Declines

Insurance rates in Ontario are on the rise, despite reductions in insurance coverage that were supposed to drive rates down.

The government promised to reduce automobile insurance rates in Ontario by 15% in the 2013 budget. It has been two years, and Ontarians are not seeing anything close to a 15% rate reduction in their insurance premiums. What we are seeing are significant and continuous cutbacks to insurance coverage, without any real changes from the insurance industry.

There has been halting and inconsistent progress in meeting the 15% rate reduction goal in the last two years, whereas measures which will slash available coverage for accident victims moved quickly from initial introduction to receiving royal assent within four months.

In November 2014, Bill 15, Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014, received royal assent. Among other things, this bill reduces the monetary limits and time period during which insurers must provide benefits to accident victims and removes the right for victims to sue their insurers in accident benefits disputes. Car accident victims must also face higher threshold and deductible amounts, reducing their recovery in tort cases against negligent drivers that were at-fault for the collision.

In the past two years, automobile insurance rates have been reduced by less than 6.5%. The regulator of the insurance sector in Ontario, the Financial Services Commission of Ontario, recently released an overview of automobile insurance rate changes in the second quarter of 2015 (available here). The findings were based on submission of 26 insurers that account for 52.75% of the market.

In the second quarter of 2015, automobile insurance rates increased by 0.6%, almost negating the reductions in the first quarter of 2015. Ontarians are now paying more for their insurance and getting much less. With the recent legislative changes to insurance coverage and more changes to accident benefits on the way, if you or a family member are involved in a car accident, you should speak with a personal injury lawyer to help navigate the changing system.

About the Authors

As a partner at Oatley Vigmond, Lara Fitzgerald-Husek uses her empathy, creativity, and trial experience to connect with her clients and help them move forward after trauma. Lara focuses her practice solely on personal injury, and she is determined to get her clients the best possible outcome—the one they deserve.

To learn more about Lara, please click here.