By: Ralph Palumbo, VP of Ontario Region, Insurance Bureau of Canada
As background, the government of Ontario is asking for public input on the auto insurance industry. The Standing Committee on Finance and Economic Affairs is studying the auto insurance industry’s practices and trends. The Committee intends to hold public hearings in Toronto, Brampton, Windsor and Thunder Bay during the week of July 9, 2012.
July, 2012 – This is not the message you expect to hear from the insurance industry but I’ll say it anyway — auto insurance rates in Ontario are too high!
You are simply paying far too much. Your families are paying too much and if you have kids who drive I don’t have to tell you — they are paying way too much.
Now that we’re on the same page � let’s ask what’s going on:
- Catastrophic (the most serious of all) injury claims are rising well ahead of other claims. From 2004 to 2010 no fault injury claims in Ontario rose 28 percent but large claims more than doubled. Are we more fragile?
- Bodily injury claims costs – cases where lawsuits have been commenced as a result of collisions – are rapidly increasing even though there has been no increase in the number of accidents. These claims represent more than $2 billion in costs annually. What is the reason behind this?
- There is a tremendous backlog of more than 30,000 unresolved claims waiting for resolution from the Financial Services Commission of Ontario. What these will cost? Nobody knows. So uncertainty reigns. Will we see a spike in large payouts? If so, premiums may not come down.
- Finally, and this is a message you’ve heard from us before, fraud is a plague on the Ontario auto insurance system. Recently in the news there were cases of staged collisions, fraudulent private, for-profit health care clinics and others looking to capitalize on the rich benefits available to Ontario drivers. One criminal gang netted an estimated $25 million. This has to stop.
There are industries and special interest groups such as for-profit health care clinics and personal injury lawyers – who profit from the auto insurance system and who want changes that would make car insurance even more expensive. They are thinking about their pocketbooks, not consumers’.
This is too important to be left to special interests. We need informed legislation that speaks to the needs of all Ontarians.
It’s time all of us — industry, government, policyholders, stakeholders, and members of the legislature � to unite and work together to do whatever is necessary to drive down claim costs.
And as the government committed in its 2012 Budget, Ontarians deserve affordable and available insurance. We agree.
About Insurance Bureau of Canada
Insurance Bureau of Canada is the national industry association representing Canada’s private home, car and business insurers. Its member companies represent 90% of the property and casualty (P&C) insurance market in Canada. The P&C insurance industry employs over 114,000 Canadians, pays more than $7 billion in taxes to the federal, provincial and municipal governments, and has a total premium base of $40 billion.
To view media releases and information, visit the media section of IBC’s website at www.ibc.ca.