Update: see previous posts – February 19, 2011 Diminished Value to Motor Vehicles Post Accident, August 22, 2010 Auto Insurance Rules Change September 1, 2010 (Ontario).
Ontario drivers were overcharged $3 billion over a decade by highly profitable insurance firms while accident benefits were slashed, a personal injury lawyers’ group says.
The insurance industry denies the allegation.
The average family should have paid $100 to $120 less for auto insurance in 2013, a study for the Ontario Trial Lawyers Association shows.
While the auto insurance industry, as a group, has reported very weak profits, individual companies have earned far more than the 11 per cent return on equity allowed by the Ontario government, the analysis by two York University professors found.
Meanwhile, accidents benefits have been repeatedly cut by government, the lawyers’ association president Steve Rastin told a press conference in Toronto.
“Families in the province are paying more and getting less,” Rastin said.
The lawyers group wants the Ontario auditor general to investigate.
The report by professors Fred Lazar and Eli Prisman says Ontario drivers paid about $840 million too much in 2013 alone.
The Insurance Bureau of Canada defended itself saying it costs are continuing to rise, and blamed the lawyers in part, saying they had billed $500 million in contingency fees that year.
The industry’s claims costs “are going up” said Ralph Palumbo, the IBC’s vice-president Ontario.
Meanwhile, premiums are regulated by the government, he noted.
NDP consumer critic Jagmeet Singh said the Liberal government is letting consumers down.
“The government has the ability to reduce the rates and time and time again they have not,” Singh said outside the press conference. “We have the most expensive auto insurance in Canada.”
At Queen’s Park, Economic Development Minister Brad Duguid told a news conference that the government has pressured insurance companies to lower rates an average of six per cent since August 2013.
“It’s an ongoing effort … we’re making good progress,” he added.
“My hope is there may be something in that report that is helpful to us … in bringing down insurance rates.”
It’s been almost two years since the NDP, applying pressure in return for support of the then-minority Liberal government’s budget, forced Premier Kathleen Wynne to promise to bring down rates by 15 per cent.
When asked if he hears many people saying thanks to the government for lower auto insurance rates, Duguid replied; “I can’t say I’ve had a lot of constituents come to me and say that.”
But he added there are likely fewer complaints than there might have been otherwise and noted auto insurance rates depend on the circumstances and driving records of individual motorists.