Brokers must advise clients on changes to auto insurance

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Ontario auto insurance is changing and brokers will need to educate their clients to ensure they have the best coverage for their lifestyle.

The Insurance Brokers Association of Ontario (IBAO) said it is preparing to launch a multi-faceted awareness campaign on Ontario Auto Reform, ahead of new changes coming into play June 1, with the aim of combatting widespread fraud and abuse of the system.

Back in 2014, the provincial government passed the Fighting Fraud and Reducing Automobile Insurance Rates Act. In a nutshell, new regulations include lower accident benefit limits in standard insurance policies, new options to increase coverage, new procedures for payment and a mandatory Winter Tire Discount (up to 5%) offered by insurance companies across Ontario.

The winter tire discount came into play as of January 1, while most changes come into effect June.

“It’s important consumers understand that Ontario Auto coverage is changing,” said Jim Murphy, IBAO CEO. “These changes continue the trend of more choice for consumers – products can be tailored to suit individual needs and budget.

“Client lifestyle is a real focus of this campaign. This is a tremendous opportunity for brokers to lead the conversation with their clients and ensure they have the best coverage for their lifestyle,” Murphy added.

But the IBAO acknowledges that car insurance can sometimes come with negative connotations, but remind consumers that insurance is a safety net, protecting against risk; insurance is a critical factor in individual and collective welfare.

The opportunity with this new set of measures is to step back and look at what your client really needs. Does their employer provide a Group Insurance Plan? Look into what that policy covers, as most benefit packages are limited to $500/year per practitioner, which can be exhausted quickly even in cases of minor accidents.

Client with dependents, like children or elderly parents, who would care for them in the event of injury?

The IBAO reminds brokers to inform clients that standard policies are just that – standard. They don’t include benefits like dependent care, and that gaps might exist depending on the lifestyle. The good news is there’s opportunity to fill those gaps by increasing coverage or adding options to cover specific areas.

The IBAO campaign will include broker education, including an on-demand webinar that reviews changes and the transition process and a panel discussion featuring insurers, legal experts and brokers – that takes a more in-depth look at the implications changes will have on consumers.

In related news, the IBAO is addressing concerns over MTO and Service Ontario, after broker feedback indicated instances of delayed connectivity between a broker's issuance of an auto policy and proof of insurance when the client arrives at the MTO or Service Ontario office.

A directive from the MTO will be sent to Service Ontario offices to reconfirm that proof of insurance by way of a liability certificate (even a faxed copy) will enable your customers to renew their stickers.

If your clients continue to have problems getting renewal stickers, the IBAO requests the location of the Service Ontario office. This will help the MTO identify those areas which may require further training.
  • Jokelee Vanderkop on 2016-01-22 5:25:29 PM

    Ontario auto insurance has definitely changed since 2010 and continues to change for the worst. Under the guise of fighting fraud, all benefits continue to be dramatically cut with many cuts implemented this June. But worse, almost one out of every 2 claimants doesn't get them when necessary in any case. Even if upgrades are made to standard policies, the upgrades are also insufficient. So what "safety net" are we talking about when far too many legitimate claimants have to fight for years to receive these ever-decreasing benefits, no matter the policy enhancement. The policy upgrades are touted as providing choice - tailored to individual needs and budgets - tell that to a seriously injured motor vehicle accident victim who gets put in the MIG (minor injury category) and can't "escape" the $3,500 maximum treatment in order to access the benefits for the seriously injured: now $50,000 in treatment benefits down from $100,000. Tell that to a non-earner who has been seriously injured and can only access $185 per week for two years maximum and then end up on ODSP. And does the public know that as of April 1, 2016, wrongfully denied claimants can no longer take their insurer to court. Want more detail - go to
    Jokelee Vanderkop

  • Brian on 2016-01-23 8:55:29 AM

    RE: "In a nutshell, new regulations include lower accident benefit limits in standard insurance policies, new options to increase coverage"

    How does slashing treatment benefits for the catastrophically injured help fight fraud? The IBAO's Alice-In-Wonderland up-is-down-and down-is-up fraud fighting rhetoric has managed to overtake even that of the IBC. How do brokers benefits from vilifying the injured (even the most seriously injured) in the way the IBAO has - and in the way this journal has? Do you people people really believe quadriplegics are exaggerating their injuries for secondary gain. Of course you don't. Your slurs are aimed at endearing yourselves with the insurers with whom you seek to cultivate more business.

  • Brian on 2016-01-26 9:20:17 AM

    Ontario's "foremost expert" on auto insurance weighs in:

    Wednesday, 20 January 2016
    Ontario's Failed Rate Reduction Strategy
    The promise to reduce auto insurance premiums by 15% is a failure.

    In August 2013 the Ontario government announced a two-year rate reduction strategy. What has ensued since that announcement has been a series of reforms to bring down the cost of insurance. Many of those reforms include no-fault accident benefit reductions.

    So how successful has the strategy been? Last week FSCO posted the fourth quarter rate approvals for 2015. The FSCO post indicates that rates fell a minuscule 0.15% in the quarter. For the entire year, rates fell by just 1.0%. Since August 2013, rates have only come down by 7.1%. That's not even half of what the government has been trying to achieve.

    Premier Kathleen Wynne now calls the 15% rate reduction strategy a "stretch goal". That's as close as you're going to get a government to admit to failure.

    Another round of no-fault accident benefit cuts are to be introduced on June 1 of this year but don't expect them to bring down rates by a significant amount. The accident benefits portion of the Ontario in 2014 was only 33.5% of claim costs (see the chart below). That would mean for a further 8% reduction in premiums, accident benefit costs would have to go down by about 24%. Meanwhile, some of the accident benefit cuts will drift over to third party liability costs since not at-fault accident victims will be able to sue for benefits no longer available through no-fault.

    It's time the government undertake a comprehensive review of the auto insurance system and resolve the systemic problems plaguing the system. Half measures lead to "stretch goals" and chronically high insurance premiums.

  • Jokelee Vanderkop on 2016-01-26 11:18:00 AM

    What the IBAO is not telling you and what every driver, pedestrian, worker needs to know in terms of their accident benefits. Read "So You Think You're Covered! The Insurance Industry Rip-Off" and find out how auto insurance policies with massive benefit cuts are just one of the things the public needs to worry about. There is much more. Inform yourself

  • Rick Dresher on 2016-01-26 12:17:30 PM

    People always think auto rates are too high. Back in 2010, the government reduced benefits to help stop rising premiums (not lower them, the legislation was actually called the Rate Stability Act, not An Act to Lower Insurance Premiums). They allowed those people who needed higher benefits to buy them (including the option of an additional $1,000,000 for catastrophic injury). We informed all our clients of the changes and what was the result? About 5% contacted us for more information and about 2% actually bought any optional benefits.
    When we quote auto insurance, NO ONE even wants to hear about the optional benefits, until they have a claim. Insurance is way too expensive the day before a claim but much cheaper the day after.

    The NDP pulled the 15% reduction out of thin air without any rationale as to how it was to be achieved. The Liberals needed their support in a minority government so they agreed but have not provided the reforms to get the savings to the system to justify a 15% reduction in rates.

    Insurers have to apply to a government regulator for rate increases AND decreases. They have to have the data to back up a request to raise or lower prices. The regulator wants to make sure the insurers aren't charging too much. But they also want to make sure the rates are not too low so that an insurer might have financial difficulties. Thankfully, only a few insurers have gone bankrupt over the years, thanks to sound regulation of the industry, but it has happened.

    The reason Ontario driver's pay more for insurance than in other provinces is that the average payout is much higher in Ontario than other Provinces.

    You can read Terrance Corcoran, National Post article Terence Corcoran: Why Ontario’s auto insurance system is a car wreck.

    The average bodily injury claim in 2014 in Ontario was $143,630. By comparison, the average in Alberta is $12,785. The average accident benefit payout was $31,785 in Ontario, compared with $7,895 in Nova Scotia and $3,766 in Alberta.

    Alberta, also a province with private insurers has the lowest rates of any province, except Quebec. Quebec has a hybrid system with some coverages sold by the government and some by the private insurers. But they have a pure no-fault system where no can sue for injuries.

    Lower claims = cheaper insurance.

  • Jokelee Vanderkop on 2016-01-26 1:06:25 PM

    Look at how the oft-cited $31,785 is reached.
    When comparing what insurers paid for health claims versus insurer assessments, the numbers are shocking and indicate that the amount of money insurers spend on claimants is disproportionate to what they spend on insurer assessments. Citing the Health Claims Database, whose numbers are insurer-generated, Alan Shanoff, writes that the “auto insurance bonanza is not for car crash victims but for the insurers’ doctors who examine them.” The Insurance Bureau of Canada (IBC) says it costs insurers $32,000 or 70 cents of each premium dollar for an average individual claim, leading one to believe that amount is for treatment costs. But the numbers reveal a wildly different story. Money spent on treatment has been dropping from $7,683 in 2011 to $4,697 in 2013. The amount going to claimants is actually significantly less because assessment costs of about 25% are included in these figures. Although assessments numbers are slightly down, insurers continue to order examinations for huge numbers of claimants despite the cost. Most of these people would have diagnoses from their own treating physicians.
    "So You Think You're Covered! The Insurance Industry rip-Off"

  • Ingrid on 2016-01-28 9:05:56 AM

    We all know as brokers that the first question most clients will ask is "if I buy only the basic how much is my premium decreasing"? and we know that the answer is going to be probably not much, when they say people can customize their policy to fit their budget I don't think that's what they mean. We are to make recommendations or council clients on what they need and I think that is a lot to ask from brokers since we don't have access to their private health care plans and those might change sometimes so who is going to be responsible for that. When there is a loss they are not looking at client for responsibility of keeping their insurance up to date they look at the broker.

  • Brian on 2016-02-01 9:36:12 AM

    Job One for newly appointed auto insurance Czar David Marshall: Public Inquiry into auto insurance claims medical evidence
    TORONTO, Feb. 1, 2016 /CNW/ - Today The FAIR Association of Victims for Accident Insurance Reform calls on newly appointed auto insurance advisor David Marshall to recommend a full public inquiry into the quality of medical evidence used in auto insurance claims.

    "It is not an exaggeration to say that we are in a crisis when it comes to medical evidence in auto insurance claims," said Rhona DesRoches, Chair, FAIR. "Ontario's auto accident victim's medical files are routinely manipulated by Ontario's auto insurers to delay and deny claims," she added.

    Mr. Marshall, the former head of the Workplace Safety and Insurance Board (WSIB), is tasked with identifying opportunities for reform in Ontario's troubled and dysfunctional auto insurance system.

    "The use of bogus medical reports and testimony has profound negative outcomes for MVA victims who are left behind by their auto insurer," DesRoches said.

    "A public inquiry is necessary to uncover the systemic abuse of Ontario's vulnerable and injured car crash victims by Ontario's insurers and our courts system, and recommend ways to address the harm," she added. "We hope Mr. Marshall will get behind the proposal to clean up this unsavoury aspect of auto insurance."

    FAIR calls on our MPPs and the public at large to support an inquiry into:

    The failure of Ontario's courts and judges to ensure that medical expert witnesses are in compliance with the Rules of Civil Procedure. Too many experts act as hired guns for insurers.
    The overuse and abuse of our courts by Ontario's auto insurers to delay payments to legitimate claimants. Currently about half of all claims are initially denied by auto insurers.
    The improper and wasteful expenditure by insurers of hundreds of millions of insurance premium dollars on medical reports to fight their own clients' legitimate claims.
    The role of Ontario's regulatory colleges in failing to meet their obligations to the public through the lax application of standards.
    The cost to the Ontario taxpayers for financial and medical support for MVA victims whose claims have been fraudulently denied by Ontario's insurers who commission poor quality or partisan medico-legal reports.
    'FAIR – supporting auto accident victims through advocacy and education'

    SOURCE FAIR Association of Victims for Accident Insurance Reform

    For further information:

    Rhona DesRoches, FAIR, Board Chair, Tel: 705 543-0574,

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