Insurance industry responds favourably to Ontario auto reforms

Canadian insurers and insurance brokers have responded favourably to the auto insurance reform package introduced by the Ontario government on Nov. 2, 2009.
Insurance Bureau of Canada (IBC) said the government’s reforms to the Ontario auto insurance system “address affordability of premiums while at the same time maintaining robust benefits — two of the industry’s primary goals for consumers.”
IBC said under the proposed new system, consumers would have a choice to buy enhanced auto insurance benefits if they so desire. At the same time, Ontario’s new basic package remains “as generous as any other jurisdiction in Canada,” IBC said.
“Ontario consumers are the real winners,” said IBC president Don Forgeron. “Insurers will work with the government to ensure that this improved auto insurance system is delivered to consumers as quickly and effectively as possible.”
Randy Carroll, CEO of the Insurance Brokers Association of Ontario (IBAO), said the association was supportive of the proposed auto insurance reforms announced [Nov. 2].
“They are consumer-focused and should help stabilize auto insurance rates, while still providing the coverage Ontario drivers need,” Carroll said.
The package of 41 reforms would drop minimum coverage for non-catastrophic auto injuries down from Cdn$100,000 down to Cdn$50,000. But optional packages would be available to buy coverage for Cdn$100,000 or Cdn$1 million, should the consumer choose to keep this level of coverage.
“One of the key new features for consumers is choice,” the IBAO said in a statement. “Consumers will be able to buy coverage better suited for their individual needs and budgets.
“Consumers who are happy with their current level of coverage can continue to purchase it.”
In particular, the IBAO said it was “very pleased that the government has taken our advice and will ban objectionable quoting practices related to credit scoring in auto insurance outright.”
The association said it would continue to urge the province to extend this ban to include all personal property insurance lines, such as home insurance.
“The misuse of credit scores excludes eligible drivers from finding the most economical insurance coverage,” said Carroll. “Our members are happy to see recommendations that really put consumers’ interests first.”