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Broken Auto Insurance System?

On April 16, 2014 the Globe and Mail published an article titled, Why Ontario Drivers Pay the Highest Insurance Premiums in Canada. Gluckstein Personal Injury Lawyerspartner and president of the Ontario Trial Lawyers Association, Charles Gluckstein was featured in this article discussing the insurance industry.

The opening paragraph of thearticleposes and answers the following question:

The Ontario governments 2010 reforms to private insurance were supposed to address the systems problems high premiums, fraud, over-regulation, a punitive cost structure but have they? As it stands post-reform, the insurance industry and many of its major stakeholders are in a state of undeclared war. And the government is caught in the middle, dodging volleys of angry rhetoric from opposing sides.

The industry is in shambles and needs some serious reforms; however with stakeholders on all sides of the issues advocating different options there is no clear solution going forward.

In the midst of all of this, Ontario automobile ratepayers are left paying the highest premiums in the country. A 2011 report from the Fraser Institute outlined the average annual premiums across the provinces.

Province

Average Annual Premium

Quebec

$642

PEI

$695

New Brunswick

$728

Nova Scotia

$736

Newfoundland and Labrador

$749

Alberta

$1,004

Manitoba

$1,027

Saskatchewan

$1,049

British Columbia

$1,113

Ontario*

$1,281

With respect to insurance industry profits following the 2010 amendments,, CharlesGluckstein noted, They made over $2-billion after the 2010 cuts.The insurance industry disputes these claims.

Referring to the annual Automobile Insurance Transparency and Accountability Expert Report, which the province commissioned as part of the 2010 reforms, Charles further noted:

The Government is at the mercy of the industry and their views of their profits. That's why the transparency aspect of the 2010 reforms is so vital because independent auditors will investigate the profits of the insurance industry.

The first annual report is pending and it will be interesting to see if the insurance can continue to make their claims of diminished profits in the face of an independent report.

For more information on this please view this article,Why Ontario Drivers Pay the Highest Insurance Premiums in Canada.

R E F E R E N C E S l

1. http://www.theglobeandmail.com/globe-drive/new-cars/auto-news/the-problem-how-to-fix-ontarios-broken-insurance-system/article18024824/

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