Canadian Underwriter

Only 42% of polled Ontarians aware of upcoming auto insurance reforms: IBAO

May 25, 2016   by Canadian Underwriter

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Consumer awareness of auto insurance reforms in Ontario – many of which come into force June 1 – is far from complete, with just four in 10 survey respondents reporting they are aware of the changes.

Based on feedback from 1,000 Ontarians, the survey undertaken by Bond Brand Loyalty on behalf of the Insurance Brokers Association of Ontario (IBAO) considered consumer views on both home and auto insurance.

“Insurance brokers want consumers to know auto insurance is changing,” IBAO president Doug Heaman says of the upcoming auto reforms, a key thrust of which is to fight fraud.

Changes further seek to provide greater choice for consumers and help achieve the Ontario government’s promised rate reduction targets, notes a statement from IBAO, which represents more than 12,000 independent property and casualty insurance brokers across the province.

That said, just 42% of the consumers polled are aware of the upcoming changes. Add to that that “less than one in five can cite specific changes within the legislation. Not surprisingly, virtually all respondents are in favour of insurers not being able to increase rates for minor accidents,” states the survey report, IBAO 2016 Consumer Survey.

Related: Reduced auto insurance accident benefits could influence balance between attendant care, treatment: lawyer

“Given these changes to the auto insurance product, it’s crucial consumers understand the significance and the cost to buy-back enhanced Accident Benefit limits,” Heaman emphasizes in the statement.

IBAO reports that survey results show rates and premiums are mentioned by roughly half of polled consumers as the most important feature of insurance. This is followed by the amount of coverage they have. [click image below to enlarge]

That being the case, Heaman notes, “it’s important they (consumers) understand the implications of this auto insurance reform and use their insurance broker for guidance. The cost to increase benefit levels is relatively inexpensive.”

“Once an accident occurs, it is too late to make changes to your insurance coverage to increase the benefits payable to the injured party,” Leonard Kunka, partner at Thomson, Rogers, notes in a separate statement. “People need to seriously consider buying optional accident benefits coverage, which provides additional levels of protection for people injured in a motor vehicle accident,” Kunka recommends.

The IBAO survey results indicated that, in terms of respondent satisfaction, those aged 55 and older are significantly more satisfied with both their auto and home policies compared to younger segments (18-34 and 35-54).

An age divide also exists with respect to search behaviours, with survey findings showing that “18-34-year-olds are significantly less likely to use a broker for auto or home insurance compared to older age brackets.”

In all, two-thirds of respondents say they want the advice of an insurance broker during the process of obtaining insurance (67% for home, 64% for auto). Respondents cite customer service, matching policies to needs, and helping with paperwork as the top three broker attributes with which customers are satisfied.

“The results of this survey prove consumers seek advice from community-minded brokers who are dedicated to consumer protection,” Jim Murphy, CEO of IBAO, says in the statement.

Related: Ontario adjusters will need retraining on injury definitions as part of auto reforms taking effect in June: Walker

Other responses from respondents indicate the following:

  • sources sought for auto insurance information and home insurance information are insurance companies (59% and 58%, respectively), brokers (49% and 50%), friends/family/colleagues (38% and 39%), Google/search engine (38% and 36%), bank (16% and 20%), social media (6% apiece) and other (3% apiece);
  • insurance clients would like to be contacted an average of 1.6 times annually (those aged 55 years or older prefer regular mail significantly more than other age groups, while respondents aged 18-34 prefer email significantly more than other age groups);
  • two-thirds of those who have submitted a claim were satisfied (on specific elements of the experience, the auto claims experience is more satisfactory than home); and
  • 69% believe there is fraud in the Ontario auto insurance system (auto body shops are perceived to be most responsible for this fraud, followed by insurers and consumers). [click image below to enlarge]