29 Apr 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”. Charles Gluckstein, President of the Ontario Trial Lawyers Association (OTLA) and partner of Gluckstein Lawyers, was featured in this article discussing the insurance industry.
The opening paragraph of the article poses and answers the following question:
The Ontario government’s 2010 reforms to private insurance were supposed to address the system’s 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 and 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, Charles Gluckstein 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.
R E F E R E N C E S l