One province has got auto insurance reform right, says one industry player, and it is a template that could save Ontario’s current insurance woes.
Don Forgeron, president and CEO,
Insurance Bureau of Canada, told the Halifax Chamber of Commerce about a Nova Scotia success story – auto insurance reform.
“Today, premiums in Nova Scotia are among the lowest in the country. Auto insurance is affordable, and Nova Scotians have access to the benefits they need, when they need them,” Forgeron told the Halifax audience. “Since the reforms, the average cost of auto insurance in Nova Scotia has dropped almost 27 per cent.”
It wasn’t that long ago that auto insurance in Nova Scotia was in crisis.
Insurers were paying out more in claims than they were collecting in premiums, auto insurance was expensive and hard to get and consumers were unhappy – a situation Ontario auto insurers can identify with.
Fixing the auto insurance system was no easy feat, said Forgeron. It took leadership, cooperation and hard work on the part of governments, insurers and many others. Governments of differing political backgrounds saw past their differences and supported changes that led to an auto insurance system that is now the envy of many provinces.
“We continue to work to bring down the cost of premiums for Ontario’s drivers and we are doing so in the same way we did in Nova Scotia – through leadership, hard work and cooperation,” said Forgeron. “This, of course, is not easy, but it can be done. The private sector can work successfully with governments of all political stripes so consumers can come out on top. Nova Scotia is proof of that.” (continued.)
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Ontario’s nine million drivers consistently pay the most for auto insurance in Canada. And claims costs are extremely high compared to other jurisdictions. In 2013, the average cost of an accident benefit claims payout in Nova Scotia was $8,600; in Ontario, it was $31,785.
In Ontario, one of the biggest problems driving up premiums is that there are too many players looking for a piece of what they see as the “car accident business,” said Forgeron. These players are draining much-needed resources and, in some cases, defrauding the system by staging collisions, falsifying medical claims and exaggerating auto body repair costs.
In Ontario, only 57 per cent of payouts actually goes to the accident victim; the rest goes to cover expenses unrelated to treatment and lost income.
