Ontario: 2015 Budget Reduces Auto Insurance for Drivers

Update:see previous posts – April 10, 2015 Auto-Insurance Companies Overcharge Ontario Driver’s $3 Billion Dollars, April 16, 2014 Ontario: Highest Auto Insurance Premiums in Canada.

The government says when a driver gets involved in certain types of minor, at-fault accidents, insurers will no longer be able to automatically increase their premium.
The Liberal Finance Minister Charles Sousa announced changes in his Ontario 2015 Provincial budget. One of the changes he announced is when a driver gets involved in certain types of minor, at-fault accidents, insurers will no longer be able to automatically increase their auto-insurance premiums.

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The Ontario Liberals led by Premier Kathleen Wynne, handed down their 2015 Ontario budget today.

The ruling Liberal party (through Finance Minister Charles Sousa) announced, amongst other things, that driver’s in Ontario would benefit from the 2015 budget, through reduced auto-insurance premiums by vairious measures.

Finance Minister Charles Sousa promised drivers in Ontario, in the 2013 Liberal budget, that their insurance premiums in 2013 would be reduced by 15% on average by August 2015 – but have only managed to reduce those insurance premiums by half to date.

In the 2015 budget today, Sousa made the following announcements, which were extremely short on facts, figures and timelines:

  • The Provincial government will force insurance companies providing auto-insurance to provide Ontario drivers who place snow tires on their vehicles with an insurance discount.
    • The government says when a driver gets involved in certain types of minor, at-fault accidents, insurers will no longer be able to automatically increase their premium. But the government has yet to lay out the criteria for such accidents. It will consult with the industry before doing so.
    • The government will also limit the maximum interest rate that some drivers pay on monthly auto insurance premium payments to 1.3 per cent, down from three per cent today.
    • The government will establish a $300 standard deductible for comprehensive coverage, as opposed to $500 — a level where it has otherwise stood for some time in Ontario.
    • There are also coming changes to basic auto insurance benefits. The government will combine medical and rehabilitation benefits with attendant care services as a single benefit set at $65,000. These separate benefits used to total more than $80,000. However, drivers will still be able to pay for increased coverage to a total of $1 million. A similar change will be made in the case of catastrophic accidents. Services will be combined as a single benefit to a limit of $1 million. That’s down from a combined $2-million limit today. But drivers will be able to pay more for coverage up to $2 million.

    Unfortunately Sousa was short on details that outlined the level of savings that drivers would receive or when any of these savings would be realized or when the changes would be implemented.

    Ontario drivers continue to pay the highest auto-insurance premiums of any Province/Territory in Canada.
    Ontario drivers continue to pay the highest auto-insurance premiums of any Province/Territory in Canada.

    We already know that Sousa’s 2013 budget promise of a 15% auto-insurance premium for Ontario driver’s by August 2015 has only been half fulfilled. Maybe by 2017, the whole 15% will have been reached.

    It is reasonable, based on the past performance by this government, to expect a very slow implementation of Sousa’s budget announcements today. Sousa could not say with any certainty, how much driver’s would save on any of his announcements or when those particular changes would be implemented. He kept mentioning that he would have to consult with Insurance industry to work out the details.

    Andrea Horwath, leader of the Ontario NDP, said that Ontario has “the lowest rate of accidents in the country,” but pays the highest insurance rates.

    As for any benefits stemming from changes the Liberals have made, Horwath said they have gone to insurance companies.

    “It never trickles down to the drivers,” she said.

    It should be noted that after Ontario’s previous Premier Dalton McGuinty resigned and before Kathleen Wynne was elected, as the leader of the Provincial Liberal Party, an election took place within the Liberal party for a leader.

    In that election, the Insurance Bureau of Canada contributed $60,000.00 to the leadership frontrunners. The Insurance Bureau of Canada made the following financial contributions to the following individuals:

    1. $25,000 to Kathleen Wynne (who happened to be elected on Jan.26/13, on the third ballot, as Ontario’s next Premier)

    2. $25,000 to Sandra Pupatello (who had to wait to the third ballot to learn that her rival Wynne had secured victory)

    3. $10,000 to Dr. Eric Hoskins

    4. $500 to Charles Sousa

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