IBC says Ontario NDP critic cherry picking facts on auto insurance premiums

The Insurance Bureau of Canada says the Ontario NDP’s consumer affairs critic is cherry picking his facts on auto insurance premiums in the province, after the MPP presented research on the issue Monday.

NDP consumer affairs critic and Bramalea-Gore-Malton MPP Jagmeet Singh argued Monday that insurance companies “have been saving 25% per insured driver following recent insurance reforms even though the average driver has seen their rates increase.”

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That figure comes from the NDP’s research of industry data between 2010 and 2011. “If the cost of insuring a car has gone down why are drivers paying more? Ontario drivers are paying the highest rates in the country and deserve some real answers,” Singh noted in an NDP statement.

The party said its research also showed:

• The cost to insurance companies of insuring a vehicle fell from $1274 to $984 per vehicle. But the premiums paid by drivers increased from an average of $1432 to $1505 per vehicle.

• The value of “statutory” accident payouts fell by just under $2 billion – an astonishing 50 per cent reduction from 2010.  But Ontarians’ auto insurance rates still increased by 5 per cent.

• In 2011, auto insurance companies took in $3.4 billion more in premiums than they paid out in accident benefits.

But that research is flawed, IBC argued Monday, and despite its attempts to help Singh better understand the situation, the MPP continues to play politics.

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“It’s a massive disservice to his constituents in Brampton and to Ontarians in general when NDP Consumer Critic Jagmeet Singh cherry picks his facts and uses them to base his argument and conclusions,” Ralph Palumbo, vice president of Ontario for IBC noted in a public statement.

“While there is some truth to his simplistic math, the story he tells is far from complete. We’ve tried to explain this to Mr. Singh on many occasions. He just prefers playing politics rather than dealing with the real problems in Ontario’s auto insurance system.”

The claims cost numbers being reported are based on estimates provided by the General Insurance Statistical Agency (GISA), not on the actual claims payments made by insurers on claims that have been successfully closed, IBC said.

“If you had an accident in 2011 you might still be getting related treatment in 2012, and if you commenced a law suit against an at-fault driver, you might not have a settlement for two or more years,” IBC noted. That means GISA has  to estimate what final claims costs may be. 

The mediation backlog at the Financial Services Commission of Ontario (FSCO) also means that many claims aren’t yet settled, so changes implemented by the September 2010 reforms aren’t always yet reflected in the data, IBC added. 

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“We have made these simple facts abundantly clear to Mr. Singh in several meetings,” Palumbo said. “It’s just plain convenient for him to use numbers for his own political purposes and not to focus and address the very serious problems that our auto insurance system continues to experience.

“Perhaps Mr. Singh should read the recent report from the Ontario Anti-Fraud Task force which states that KPMG estimated that the price of fraud was up to $1.56 billion dollars in 2010. In the GTA alone, fraud adds an additional $240 to $540 on each and every insured vehicle.”

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Singh has said that Ontario’s MPPs need to be able to “get back to work” on auto insurance reforms for the province’s consumers. He called on the government to recall the legislature ao the all-party auto insurance review committee to complete its work.