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Deep Dive: How the PC Government Hopes to Fix Car Insurance in Ontario

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Last week, Vic Fedeli, Finance Minister for Ontario, gave his first Budget to the Ontario Legislature. The comprehensive plan will balance the budget within five-years, introduce no new taxes and it will end the deficit. Providing $26 billion in relief, the Government is starting a people-focused initiative.

Care Not Cash a Huge Win for Drivers

Back in 2017, David Marshall’s report outlined the need for insurance resources to better treat injured drivers. Marshall is president and CEO of the Workers Safety & Insurance Board (WSIB). His proposed changes would lower insurance, improve victim outcomes and strengthen consumer protection.

Marshall's findings were a startling revelation at the time. He found that in 2015, Ontario drivers paid the highest premiums in Canada - $1,458 for each vehicle, on average. The amount was 55 percent higher than in other provinces. Had drivers paid the average insurance costs of about $930, they would pay $4 billion less annually.

Marshall also noted that every year $1.4 billion went to attorney fees. And, he found that Ontario residents were receiving substandard care after accidents. The Progressive Conservatives' proposals aim to correct this issue through changes to legislation and by limiting bureaucracy.

Legal fee arrangements will be reevaluated in an effort to redirect funds. More proposed changes include lowering auto insurance costs and simplifying coverage options. Electronic proof of insurance and Driver Care Cards are also part of the changes.

Sweeping Reform, Putting Drivers First

The changes come at a time when driver frustration is at an all-time high. And, the Progressive Conservatives called Ontario's auto insurance “expensive and convoluted”. As a resolution, the Budget is introducing, Putting Drivers First.

Reform will fix the broken system, increase market competitiveness and decrease rates. Drivers will have more auto insurance coverage options and more control over rates. These are part of the changes noted in the release the government issued last week.

"Today’s announcement focuses resources squarely where they should be: on helping those injured in auto collisions recover. Auto insurance is complex, but the proposed changes clearly intend to make the claims process simpler for consumers.” That’s from Kim Donaldson, Ontario vice-president of the Insurance Bureau of Canada.

More Claims Help for Drivers Injured in Accidents

Proposed changes for injured drivers include:

  • A Driver Care Card for faster access to care and to expedite the claims process.
  • Ensuring policies cover necessary treatments.
  • Letting drivers have a cash settlement option - where applicable.
  • Treatment access for injured drivers and new mental health services.
  • Reform of medical assessments with injury claims.
  • Discounts for drivers who agree to reveal their credit history.
  • Discounts for those who agree to use preferred auto repair shops and preferred healthcare providers.

The Province is also ending the $1 million benefit that took effect 3 years ago. It will revert to a default benefit of $2 million for catastrophic injuries.

Insurance That’s More Accessible, More Affordable

When it looked for ways to make insurance more affordable and accessible, the Province poled 51,000 Ontario residents. Proposed measures by the FSRA will improve the auto insurance market and put money back in the pockets of drivers.

Proposed changes include:

  • Improving insurance regulations to decrease red-tape.
  • Higher penalties to reduce fraud and court-related activities.
  • Discounts and more options for insurance companies with products like pay-as-you-go insurance.
  • Electronic auto insurance for motorists which replaces pink slips.
  • A private member’s bill that ends postal code driver discrimination.

Fixing the Broken Auto Insurance System

The Financial Services Regulatory Authority of Ontario (FSRA) is an independent regulator. They will help target ways to reduce insurance fraud with new regulations, simpler claims and advanced data analytics.

"When it comes to driving, it is clear that Ontario's auto insurance system is broken - and drivers deserve better. That is why our government is making transformative changes to the province's auto insurance system," Fedeli said in talks last week.

While the budget didn’t indicate set timelines or premium reduction totals, massive changes are underway. And, that’s good news for Ontario drivers and insurance providers alike.