Ontario Okays Fully Digital Auto Insurance

The Ontario government’s 2020 budget announcement paved the way for car insurance providers to introduce fully digital insurance to consumers.

Entitled “Ontario’s Action Plan: Protect, Support, Recover”, chapter one of the budget outlines how the province will respond to the health and economic impacts of COVID-19 by committing $45 billion in support over the next three years. The government pledged to continue to monitor the effects of COVID-19 on the provincial auto insurance system to ensure consumers are being treated fairly.

"Since day one of the pandemic, protecting people has been our government's number one priority," said Finance Minister Rod Phillips. "The health risks of COVID-19 remain extremely serious. We are making available every necessary resource to keep people safe, including our loved ones in long-term care and our frontline health care heroes during the second wave and beyond."

The 2020 budget follows on the government’s “Putting Drivers First: A Blueprint for Ontario’s Auto Insurance System” 2019 report, which replaced the Financial Services Commission of Ontario with the Financial Services Regulatory Association (FSRA), the provincial regulator overseeing how car insurance is administered.

The next phase of that blueprint involves:

• Enabling insurance companies to offer full digital services to their customers in Ontario.
• Allowing FSRA to pilot new initiatives that bring new products and services to the market quickly to address shifting consumer needs.
• Strengthening fraud deterrence by allowing insurers to reject vehicle damage claims where misrepresentation or fraud is involved.
• Establishing a task force to improve oversight of the towing industry.
• Allowing insurers to offer more coverage options, including optional not-at-fault property damage for drivers who feel insuring an older vehicle costs more than the car is worth.
• Allowing credit unions to sell insurance in their branches and online through a subsidiary or partnership.

Insurers applaud Ontario’s commitment to helping drivers

The Insurance Bureau of Canada (IBC) issued a statement applauding the government’s move. IBC said Ontario’s moves will benefit drivers by helping them control their premiums by removing restrictions on things such as usage-based insurance and responding to consumers’ increasing demand to manage their policies digitally.

"Today's budget removes barriers for insurers who are committed to offering the innovative products that consumers are accustomed to receiving from other sectors,” said IBC Ontario Vice-President Kim Donaldson.

Aviva Canada’s managing director of personal insurance, Phil Gibson, issued a statement on the government’s budget highlighting the moves will help transform how insurance companies serve their customers.

“We are pleased to see the Ontario government promoting innovation in the insurance industry,” Gibson said. “This is a step in the right direction that will give insurers more room to innovate and offer more customized products that better meet the needs of our customers and drivers in Ontario."

Previously, the government said it helped more than 90% of Ontario drivers save nearly $1 billion in auto premiums during the pandemic to date.

Drivers who are concerned about paying car insurance bills due to the ongoing COVID-19 pandemic or are seeking ways to reduce their premiums should contact their insurance company or broker to inquire how they can help.