Ontario: Latest Auto Insurance Rates Down 4%: Reports

Update:

Ontario's auto insurance rates have dropped a further 3.98 per cent -- for a total of 4.66 per cent on average since August 2013. That progress is making auto insurance more affordable for Ontario drivers, and keeps the province on track for achieving the 15 per cent reduction by August 2015.
Ontario’s auto insurance rates have dropped a further 3.98 per cent — for a total of 4.66 per cent on average since August 2013. The Ontario Liberals promised Ontario drivers that Auto Insurance rates would be reduced by 15 per cent by August 2015. The Liberals said that auto insurance would be cut by 8% in the first year and it doesn’t look like this will happen.  Given the lack of real action by the Liberals, an election could be called as early as the spring of this year. Insurance companies continue to make profits of about 2 billion dollars a year, off the increased premiums on motorists who pay for auto insurance. Motorist’s have paid more insurance for less benefits since Sept. 2010.

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The Financial Services Commission of Ontario will indicate auto insurance rates are down about four per cent when it releases its figures on Wednesday, according to published reports.

The Liberal government agreed to an NDP demand for a 15 per cent cut in car insurance rates over two years in order to get last year’s provincial budget passed.

“Drivers are frustrated. Experts have testified that the industry enjoyed a $1.6-billion after-tax profit in 2012 alone, but drivers are still waiting for relief, and some have seen steep hikes,” NDP critic Jagmeet Singh said in a statement.

“I know it’s January, but I think I’ve seen molasses move faster.”

Singh had said his party believed the Liberals were nowhere near meeting their promised goal of an average eight per cent cut in the first year. The Liberals had promised to reduce rates by eight per cent over a year and 15 per cent in two years.

He said that actuarial experts who appeared at hearings on auto insurance concluded that the average premium for drivers was $1,544.25, but the average benefit claim was $958.87. That means for every dollar insurers take in in premiums, only 62 cents is being paid out in benefits for accident victims.

The Insurance Bureau of Canada said that for the area that includes metro Toronto as well as Markham, Richmond Hill, Vaughan and Peel districts, the average written premium is $2109.50.

Singh says the New Democrats are willing to look at what’s in the 2014 Liberal budget before deciding whether or not to support it.

But he notes the Liberals have yet to keep last year’s budget promises to the party.

It’s widely expected this year’s budget could trigger a general election, whether by the Liberals’ design or because the NDP agree to team up with the Progressive Conservatives to defeat the minority government.

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