The Effect of a Ticket on your Insurance Rates: Private Insurance companies only understand one word – “profit”; their motto is “greed”.  Private Insurance companies will take any opportunity to increase their profits.

Providing insurance is an extremely profitable and lucrative business, especially in the Province of Ontario, Canada. When a motorist in Ontario is convicted of an offence, the conviction will remain on the “driver’s record” with the Ministry of Transportation for a period of two (2) years from the date that the motorist was charged with the offence (not from the conviction date).  See Demerit Points. At the same time, privately owned insurance companies insist that the same motorist have the conviction registered on their “insurance record” for an extra year, in this case, three (3) years from the date that the motorist was charged.  Upon learning of the conviction, many private insurance companies in Ontario, will increase the premiums of the driver, anywhere from three (3) to seven (7) years. Staying with a private insurance company, long term, does not normally benefit the driver and it is best to continue to keep your options open and continue searching for a better deal, with a different insurer. Private Insurance Companies in Ontario all have their own conviction surcharge schedule.  Depending on the type of conviction (the more serious, the more you’ll pay) and your prior driving/insurance record, your insurance company may insist that you be covered under New Facility or Facility Association.  This means that on top of the insurance premiums that you are already paying, Facility Association may charge additional amounts anywhere from 100-250 % of what you already pay (ie- normal premiums $ 1,500.00 + Facility $ 3,750.00 = $ 5,250.00) In order to be the motor vehicle operator and to drive the vehicle, the vehicle must be insured.  The reason, so many of us dread the thought of receiving a traffic ticket and the conviction that may follow; is the real possibility that our insurance company, upon becoming aware of the conviction, may increase our insurance premiums for the following three (3) to six (6) years following the conviction.  This is generally the reason we fight our tickets so vigorously. Currently, the cost of living is so high and the last thing any driver needs to include in their budget, is the ever increasing insurance premiums (which are seldom ever justifiable) of the private insurance companies. Given the obscene profits which the private insurance companies make in Ontario, the best solution available to consumers, (who have no choice but to purchase automobile insurance if they want to drive) is to insist on Public Auto Insurance. Several Provinces, ,British Columbia (ICBC), Manitoba, Saskatchewan and Quebec have provincially owned and operated automobile insurance and the residents benefit from the cheaper premiums.  Ontario Private Insurance Companies offer the most expensive automobile insurance in Canada. Public Auto Insurance offers cheaper insurance premiums to motorists and is controlled by the Provincial Government. Public Auto Insurance works in other Provinces in Canada and it would certainly work in Ontario. Private Insurance companies are notorious, if subjected to strong public criticism, for crying poor, while laying off employees and jacking up their insurance rates. Every time the private insurance companies complain of loss, they are erecting new buildings or purchasing existing skyscrapers. This year, the Financial Services Commission of Ontario ( the “Commission”) approved insurance increases, an average of 2.49%, to half of the Insurance Companies in Ontario. Here is a breakdown of the four (4) largest increases, which the Commission approved for the following Private Insurance companies:

• Farm Mutual Reinsurance = 5.95%
• Allstate Insurance = 5%
• RBC (Royal Bank) General Insurance = 3.75%
• State Farm Insurance = 3.08%

See the insurance premium increases that the Financial Services Commission of Ontario approved for the third quarter of 2008 (this information is from their website):

Auto Insurance Rates for the Third Quarter of 2008

Rate applications approved during the third quarter of 2008 (July 1, 2008 to September 30, 2008) averaged +0.87%, based on the entire market.

The rate changes approved in 2004, 2005, 2006 and 2007 were -10.60%, -2.43%, -1.27% and +0.55%, respectively, for the entire market. In the third quarter of 2008, for the 77.97% of the market that had rate changes approved, the average rate change was +1.12%, when weighted by market share. The rate changes approved in the third quarter of 2008 become effective in the third quarter of 2008 or later for renewal business. The approved rate change shown for each insurance company is the average for that particular company.  The impact of a rate change on an individual consumer will vary depending on where the consumer lives, the type of car he or she is driving, and other risk characteristics. FSCO will continue to ensure that insurance companies’ rate changes are reasonable and justified, and that the rates insurers charge are balanced with their ability to meet their future claims costs.

1. Implementation of CLEAR update.
2. Rate changes with no overall impact.
3. Introduction of a new rate program.

Auto Insurance Rates for the Fourth Quarter of 2008

ONTARIO PRIVATE PASSENGER AUTOMOBILE INSURANCE RATE FILINGS APPROVED

October 1, 2008 – December 31, 2008

Rate applications approved during the fourth quarter of 2008 (October 1, 2008 to December 31, 2008) averaged +2.57%, based on the entire market.

In the fourth quarter of 2008, for the 69.37% of the market that had rate changes approved, the average rate change was +3.71%, when weighted by market share.

The rate changes approved in the fourth quarter of 2008 become effective in the fourth quarter of 2008 or later for renewal business.

The rate changes approved in 2004, 2005, 2006, 2007 and 2008 were -10.60%, -2.43%, -1.27%, +0.55% and +5.59%, respectively, for the entire market.

1. Implementation of CLEAR update.
2. Rate changes with no overall impact.
3. On behalf of the Ontario Mutuals.

The Insurance Bureau of Canada (www.ibc.ca) posted on-line, profits for its’ members in 2003 up to 673% (2.6 Billion Dollars) and a year later, in 2004 up 61.5% or 4.2 Billion Dollars.  When the public freaked, the Insurance Bureau of Canada made the decision to hide its’ members profit’s and put an end to posting its members ever increasing profits on its website. Ontario is now an official “have not“ province and will begin to rely upon and receive, equalization payments in 2009.  Future equalization payments will be calculated and linked to the moving average of GDP (Gross Domestic Product) growth. Private Insurance Companies have found that advertising with the “we care for you” message is very profitable, no one is fooled. The system is designed to yield maximum profits, annually, for prviate insurance companies and not protection for consumers. In Ontario, the Provincial Government must seriously consider the introduction of Public Auto Insurance, which would be a great thing for consumers of all ages who drive on Ontario’s roads. See “Auto Insurance Consumers’ Bill of Rights ” (in PDF format).

Auto Insurance Rates for the First Quarter of 2009

Rate applications approved during the first quarter of 2009 (January 1, 2009 to March 31, 2009) averaged +0.95%, based on the entire market.

In the first quarter of 2009, for the 30.91% of the market that had rate changes approved, the average rate change was +3.09%, when weighted by market share.

The rate changes approved in the first quarter of 2009 become effective in the first quarter of 2009 or later for renewal business.

The rate changes approved in 2004, 2005, 2006, 2007 and 2008 were -10.60%, -2.43%, -1.27%, +0.55% and +5.59%, respectively, for the entire market.

The approved rate change shown for each insurance company is the average for that particular company.  The impact of a rate change on an individual consumer will vary depending on where the consumer lives, the type of car he or she is driving, and other risk characteristics.

FSCO will continue to ensure that insurance companies’ rate changes are reasonable and justified, and that the rates insurers charge are balanced with their ability to meet their future claims costs.

1. Implementation of CLEAR update.
2. Rate changes with no overall impact.

Auto Insurance Rates for the Second Quarter of 2009

Rate applications approved during the second quarter of 2009 (April 1, 2009 to June 30, 2009) averaged +3.20%, based on the entire market.

In the second quarter of 2009, for the 54.67% of the market that had rate changes approved, the average rate change was +5.86%, when weighted by market share.

The rate changes approved in the second quarter of 2009 become effective in the second quarter of 2009 or later for renewal business.

The rate changes approved in 2004, 2005, 2006, 2007 and 2008 were -10.60%, -2.43%, -1.27%, +0.55% and +5.59%, respectively, for the entire market.

The approved rate change shown for each insurance company is the average for that particular company.  The impact of a rate change on an individual consumer will vary depending on where the consumer lives, the type of car he or she is driving, and other risk characteristics.

FSCO will continue to ensure that insurance companies’ rate changes are reasonable and justified, and that the rates insurers charge are balanced with their ability to meet their future claims costs.

1. Introduction of a new rate program.
2. First filing independent of Farm Mutual Reinsurance Plan Inc

Auto Insurance Rates for the Third Quarter of 2009

Rate applications approved during the third quarter of 2009 (July 1, 2009 to September 30, 2009) averaged +2.13%, based on the entire market.

In the third quarter of 2009, for the 34.38% of the market that had rate changes approved, the average rate change was +6.2%, when weighted by market share.

The rate changes approved in the third quarter of 2009 become effective in the third quarter of 2009 or later for renewal business.

The rate changes approved in 2004, 2005, 2006, 2007 and 2008 were -10.60%, -2.43%, -1.27%, +0.55% and +5.59%, respectively, for the entire market.

The approved rate change shown for each insurance company is the average for that particular company.  The impact of a rate change on an individual consumer will vary depending on where the consumer lives, the type of car he or she is driving, and other risk characteristics.

FSCO will continue to ensure that insurance companies’ rate changes are reasonable and justified, and that the rates insurers charge are balanced with their ability to meet their future claims costs.

1. On behalf of the Ontario Mutuals.
2. Business transfer from Kingsway into Jevco.

Auto Insurance Rates for the Fourth Quarter of 2009

The Government has announced a number of automobile insurance reforms. These reforms will provide consumers with more choice and flexibility to purchase coverage that best meets their protection needs and budgets.

These reforms are in the process of being implemented and are not reflected in this quarter’s rate approvals.

Rate applications approved during the fourth quarter of 2009 (October 1, 2009 to December 31, 2009) averaged +2.49%, based on the entire market.

In the fourth quarter of 2009, for the 55.48% of the market that had rate changes approved, the average rate change was +4.49%, when weighted by market share.

The rate changes approved in the fourth quarter of 2009 become effective in the fourth quarter of 2009 or later for renewal business.

The rate changes approved in 2004, 2005, 2006, 2007, 2008 and 2009 were -10.60%, -2.43%, -1.27%, +0.55%, +5.59% and +8.77%, respectively, for the entire market.

The approved rate change shown for each insurance company is the average for that particular company. The impact of a rate change on an individual consumer will vary depending on where the consumer lives, the type of car he or she is driving, and other risk characteristics.

FSCO will continue to ensure that insurance companies’ rate changes are reasonable and justified, and that the rates insurers charge are balanced with their ability to meet their future claims costs.

1. Implementation of CLEAR update.
2. On behalf of the Ontario Mutuals.

Auto Insurance Rates for the First Quarter of 2010

The Government has passed regulations to enact automobile insurance reforms effective September 1, 2010.  The reforms will provide consumers with more choice and flexibility to purchase coverage that best meets their protection needs and budgets.

All auto insurance companies are required to file new rates with FSCO in April that take into account these reforms.  The impact of these reforms will be reflected in upcoming rate approvals.

Rate applications approved during the first quarter of 2010 (January 1, 2010 to March 31, 2010) averaged +5.37%, based on the entire market.

In the first quarter of 2010, for the 97.18% of the market that had rate changes approved, the average rate change was +5.53%, when weighted by market share.

The rate changes approved in the first quarter of 2010 become effective in the first quarter of 2010 or later for renewal business.

The rate changes approved in 2004, 2005, 2006, 2007, 2008 and 2009 were -10.60%, -2.43%,  -1.27%, +0.55%, +5.59% and +8.77%, respectively, for the entire market.

The approved rate change shown for each insurance company is the average for that particular company. The impact of a rate change on an individual consumer will vary depending on where the consumer lives, the type of car he or she is driving, and other risk characteristics.

FSCO will continue to ensure that insurance companies’ rate changes are reasonable and justified, and that the rates insurers charge are balanced with their ability to meet their future claims costs.

1. Implementation of CLEAR update.
2. Rate changes with no overall impact.

Auto Insurance Rates for the Second Quarter of 2010

The Government has passed regulations to enact automobile insurance reforms effective September 1, 2010.  The reforms will provide consumers with more choice and flexibility to purchase coverage that best meets their protection needs and budgets.

All auto insurance companies were required to file new rates with FSCO in April that took into account these reforms. These filings have now been approved and the following table reflects the changes to auto rates approved in the second quarter of 2010 and effective September 1, 2010.

Rate applications approved during the second quarter of 2010 (April 1, 2010 to June 30, 2010) averaged -1.03%, based on the entire market.

In the second quarter of 2010, for the 100% of the market that had rate changes approved, the average rate change was -1.03%, when weighted by market share.

The rate changes approved in the second quarter of 2010 become effective in the third quarter of 2010.

The rate changes approved in 2004, 2005, 2006, 2007, 2008 and 2009 were -10.60%, -2.43%, -1.27%, +0.55%, +5.59% and +8.77%, respectively, for the entire market.

The approved rate change shown for each insurance company is the average for that particular company. The impact of a rate change on an individual consumer will vary depending on where the consumer lives, the type of car he or she is driving, and other risk characteristics.

FSCO will continue to ensure that insurance companies’ rate changes are reasonable and justified, and that the rates insurers charge are balanced with their ability to meet their future claims costs.

Notes:

1. Auto Reform Filings
2. On behalf of Ontario Mutuals

Auto Insurance Rates for the Third Quarter of 2010

The Government passed regulations to enact auto insurance reforms effective September 1, 2010. These reforms are designed to reduce excess assessment costs in the auto insurance system and ensure more accident benefit dollars go to treating people injured in auto accidents.

Ontario drivers now have more choice when it comes to their auto insurance coverage. Drivers can opt for a new standard level of auto insurance coverage, or they can choose to buy additional levels of coverage based on their own circumstances.

As part of the reforms, drivers will also benefit from the new consumer protection measures, including the implementation of a regulation that prohibits the use of a driver’s credit rating in connection with auto insurance.

Rate filings approved during the third quarter of 2010 (July 1, 2010 to September 30, 2010) averaged -0.09%, based on the entire market.

In the third quarter of 2010, for the 45.30% of the market that had rate changes approved, the average rate change was -0.21%, when weighted by market share.

The rate changes approved in the third quarter of 2010 become effective in the third quarter or later.

The approved rate change shown for each insurance company is the average for that company based on all the consumers it insures.  An individual consumer may experience a rate change that is either higher or lower than the average, depending on the vehicle insured, where he or she lives and other risk factors as well as choices made by the consumer on coverages purchased and deductible or liability limits.  Also, as most consumers purchase annual policies, the rate change from the last renewal will also reflect any changes approved for the insurer in the last year. For more information about auto insurance, please review FSCO’s brochure Understanding Auto Insurance.

Ontario has a very competitive auto insurance market.  Rates vary from company to company because each company bases its rates on its own claims costs and uses a different set of risk characteristics to determine the rate for a specific consumer.  FSCO reviews filings from companies to ensure that the rates proposed are justified based on claims costs and other operating costs.  As a result of FSCO’s review, an insurance company may be required to amend its proposed rates before the rates are approved.

FSCO’s Understanding Rates/An Interactive Tool demonstrates how rates for the same coverage can vary from company to company.  You can see how rates will vary depending upon whether you choose to purchase a policy with standard Accident Benefits coverage or with other optional coverages as well as your personal profile.

FSCO will continue to ensure that rate changes by insurance companies are reasonable and justified, and that rates charged are balanced with the ability of companies to meet future claims costs.

1. Transfer of existing Pilot, Elite and S&Y risks on renewal to Aviva and Scottish & York.
2. Rate changes with no overall impact.

Total Market Share Represented: 45.30%

When an insurance company adjusts its rates for any given coverage, it means that the company has experienced a change in the claims costs for that coverage.  For example, an increase to rates for Accident Benefits coverage would indicate that an insurance company has experienced an increased number and/ or increased average cost of Accident Benefit claims. A company must provide its claims costs for each coverage in support of any change in rates.  The weighted average approved rate change shown is the average for each coverage based on the company filings that were approved during the quarter.

This pie chart illustrates what coverages consumers buy with their premium dollars based on 2009 premiums.  It shows that most premium dollars go towards purchasing standard Accident Benefits:

Auto Insurance Rates for the First Quarter of 2011

The Government passed regulations to enact auto insurance reforms effective September 1, 2010. These reforms are designed to reduce excess assessment costs in the auto insurance system and ensure more accident benefit dollars go to treating people injured in auto accidents.

Ontario drivers now have more choice when it comes to their auto insurance coverage. Drivers can opt for a new standard level of auto insurance coverage, or they can choose to buy additional levels of coverage based on their own circumstances.

As part of the reforms, drivers will also benefit from the new consumer protection measures, including the implementation of a regulation that prohibits the use of a driver’s credit rating in connection with auto insurance.

Rate filings approved during the first quarter of 2011 (January 1, 2011 to March 31, 2011) averaged +1.78% based on the entire market.

In the first quarter of 2011, for the 53.64% of the market that had rate changes approved, the average rate change was +3.32%, when weighted by market share.

The rate changes approved in the first quarter of 2011 become effective in the first quarter or later.

The approved rate change shown for each insurance company is the average for that company based on all the consumers it insures. An individual consumer may experience a rate change that is either higher or lower than the average, depending on the vehicle insured, where he or she lives and other risk factors as well as choices made by the consumer on coverages purchased and deductible or liability limits. Also, as most consumers purchase annual policies, the rate change from the last renewal will also reflect any changes approved for the insurer in the last year. For more information about auto insurance, please review FSCO’s brochure Understanding Auto Insurance.

Ontario has a very competitive auto insurance market. Rates vary from company to company because each company bases its rates on its own claims costs and uses a different set of risk characteristics to determine the rate for a specific consumer. FSCO reviews filings from companies to ensure that the rates proposed are justified based on claims costs and other operating costs. As a result of FSCO’s review, an insurance company may be required to amend its proposed rates before the rates are approved.

FSCO’s Understanding Rates/An Interactive Tool demonstrates how rates for the same coverage can vary from company to company. You can see how rates will vary depending upon whether you choose to purchase a policy with standard Accident Benefits coverage or with other optional coverages as well as your personal profile.

FSCO will continue to ensure that rate changes by insurance companies are reasonable and justified, and that rates charged are balanced with the ability of companies to meet future claims costs.

Auto Insurance Rates for the Second Quarter of 2011

Notes:

When an insurance company adjusts its rates for any given coverage, it means that the company has experienced a change in the claims costs for that coverage.  For example, an increase to rates for Accident Benefits coverage would indicate that an insurance company has experienced an increased number and/ or increased average cost of Accident Benefit claims. A company must provide its claims costs for each coverage in support of any change in rates.  The weighted average approved rate change shown is the average for each coverage based on the company filings that were approved during the quarter.

How cyclists in accidents are treated by Insurance Companies.

Understanding Automobile Insurance (see the Financial Services Commission of Ontario’s information guide)

At Fault Determination Rules (Insurance Act – Ont. Regulation 668)
Auto Accident Claims Process (see Financial Services Commission of Ontario website)

To Submit a Complaint against your Insurance Company: If you have a complaint against your insurance company or if you have an issue with your automobile insurance policy with your insurance company, contact The Ontario Financial Services Commission or call (outside of Toronto @ 1-800-668-0128) or in Toronto @ 416-250-6750.

Auto Insurance Claims Forms (OCF Forms): Down Load Forms

Ten (10) Tips to Save on Automobile Insurance (this is an old list found in the Toronto Star – but highly relevant in these tough economic times).

Update: June 11/09 – Insurance Companies exercise genetic discrimination.

Update: July 19/09 -Insurance Rates Skyrocket in Ontario; see post.

Update: October 5, 2009 – Ontario Liberals Support Auto Insurance Profits; see post.

Update: November 5, 2009 – Liberals Take Care of Ontario’s Auto Insurance Companies; see post.

Update: November 13, 2009 – Home Insurance Skyrockets in Ontario; see post

Update: January 19, 2010 – In addition to earlier insurance increases approved in 2009, the Financial Services Commission of Ontario (FSCO) said increases will average 8.77 %, up from 5.59 % for increases approved in 2008.

Update: August 22, 2010 – Auto Insurance Rules Change September 1, 2010 (Ontario)

Update: September 1, 2010 – What Insurance Companies Can’t Use to Determine Rates:
Your insurance company cannot use the following rating criteria to determine how much you should pay for automobile insurance:

• credit history;
• bankruptcy;
• employment status;
• whether you own a credit card;
• how long you have lived in your current home;
• accidents where you are less than 25 per cent at-fault where the accident occurred on or after September 1, 2010;
• not-at-fault accidents;
• whether your vehicle is owned or leased; and
• whether there was a period of time where you had no automobile insurance coverage.

Update: September 1, 2010 – Liberals reduce insurance benefits for injured motorists and instead, pander to profit driven Auto Insurance Companies

Update: September 1, 2010 – Ontario Auto Insurance Reforms Hurt Consumers: Critics

Update: September 1, 2010 – Ontario Premier Dalton McGuinty defends decision to save Auto Insurance Companies money and increase their profit margin at the expense of nine (9) million driver’s in Ontario.