Canadian Underwriter

What Ontario needs to do to reduce auto insurance costs

March 20, 2018   by Greg Meckbach

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If Ontario motorists want lower insurance rates, the government will have to take a harder line on distracted driving, a former Ontario civil servant said Monday.

Fraud in the collision repair industry and distracted driving are among the issues that “need to be addressed” if Ontario auto insurers want to reduce the amount of money paid out on claims, said Willie Handler, principal of Willie Handler and Associates, in an interview Monday.

Handler is a former Ontario public servant who worked for 20 years on auto insurance regulation.

In Ontario, the maximum fine for distracted driving is $1,000. “I am in favour of much tougher enforcement,” Handler told Canadian Underwriter during an interview on the provincial election, scheduled this June.

Ontario should treat distracted driving the same as blowing a “warn” on a roadside alcohol test, Handler suggested Monday, adding Ontario should roll out roadside suspensions and vehicle impoundment of motorists caught driving while distracted. “If they impounded the car for 24 hours or three days, I think that might stop the behaviour,” said Handler.

Canada’s public insurers have all announced recent efforts to crack down on distracted driving.

In Saskatchewan, drivers convicted of a second time in a year of holding, using, manipulating or viewing a handheld electronic device face a vehicle impoundment of seven days.

In British Columbia, drivers convicted twice over a three-year period of using electronic devices while driving could be forced to pay up to $2,000 in penalties to Insurance Corporation of B.C., the province’s government monopoly insurer.

The Manitoba government announced Monday it plans to  introduce three-day license suspensions for motorists caught driving while using handheld electronic devices. The suspension would be seven days for a second offence.

Aviva Canada’s immediate past CEO, Greg Somerville, told Canadian Underwriter recently that distracted driving is a major reason claims costs are climbing. Aviva, Intact and RSA are among several insurers who recently said they plan to file for auto insurance rates increases this year.

What is pushing up auto rates now are “things that David Marshall did not look at,” Handler said Monday, referring to distracted driving and fraud in the collision repair industry.

Aviva recently released results of a secret investigation in which Aviva says it caught some repair facilities submitting inflated invoices and deliberately causing additional damage to vehicles.

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9 Comments » for What Ontario needs to do to reduce auto insurance costs
  1. Brian Mcleod C.I.P. says:

    Why don’t we work together with the Police forces so they give the information at the scene to all people involved to eliminate the extra time and effort for the adjuster to either case the police for third party information or the cost to the Insurance company to pay for the report.We are seeing this more and more that our Clients have to wait for the report to be sent to the company for their deductible to be waived if not at fault.I assume the cost to the Insured’s is outrageous for police reports throughout the year ,when often it is not really required.

  2. Scott says:

    Aviva has shown that the repair industry commits fraud on a scale that is shocking.

    Lawyers take cases they know have no merit just to squeeze a few thousand out of an insurer who can’t afford to take every case to court and find it cheaper to just pay a small amount to make the claim go away.

    Claimants have real claims but somehow always own his and hers $400 sunglasses which were lost in the claim. Padding a claim is a common occurrence.

    Auto incidents that had no damage to either vehicle yet miraculously caused 3 occupants of a car to suffer multi-million dollar catastrophic injuries.

    These things go on all all day long with every insurer in the province being targeted daily.

    If anybody can figure out an effective means of addressing these issues we could reduce auto premiums by 40% minimum overnight. A good start would be to require lawyers to explain why they felt a case had merit. Their contention that you can sue anybody for anything at anytime is old and self-serving. It is time for the profession that holds you to account for your actions to be held to account for the role they play when their client is clearly “gaming” the system.

  3. Sam Singh says:

    The truth is, the insurance industry is looking for a scapegoat to blame. Couple years ago it was injury claims, then those got reformed. Then the focus changed to Towing and bylaws got introduced at city level. Now its auto fraud and all of a sudden distracted driving? 10 years ago distracted driving wasn’t an issue and it was drunk driving. Come on, get your act together. Every state and province in the US & Canada have the same issues, yet insurance south of the boarder is half price. Fraud doesn’t exist in the US? Wait, NY even has anti-steering laws, where insurers can’t force DRP’s on their customers. The truth is and everyone in claims knows; there’s a huge mismanagement of funds in the claims departments to inflate ratios. This way, it always shows losses.

    • Carrie says:

      Canada and the States cannot be compared. They are completely different markets
      They have completely different limits to their coverages and they personally sue each other all the time.
      You can get an auto policy is $100, 000 liability which is why premiums are so much lower there.

  4. Fred says:

    I think it is safe to say that the fraudulent rehabilitation clinics, often owned by those who are not health care professionals, that would apply the names and registration numbers of certain heath care providers, inflating insurance claims, have been taken care of.

    Unfortunately, the real bottom-feeders; tow truck drivers and collision centres, who are unregulated and abounding with nefarious characters are only now receiving their due recognition.

    Isn’t it time for more common sense as opposed to utilizing loop holes to game the system, as indicated by the above poster? If “ambulance chasers” did not receive the lion’s share of injury claim settlements, legitimately injured claimants might obtain the assistance that they require

  5. Dans says:

    Its much more than distracted driving –

    1. Speeding -its endemic in the GTA, no one drives at the limit ….. even in winter snow storms
    2. Snow Tires – get them
    3. Aggressive driving – seems like everyone wants to be in front, and in the left lane….what is wrong with people ? > Ties in to speeding.
    4. Culture – there seem to be cultural biases toward aggressive unsafe driving learned in other countries – ie Eastern Europe, Italy, Middle East, France…etc
    5. Congestion
    6. Society is “in a hurry”
    7. Long commutes
    All these, plus depersonalized insuring lead to fraud, and claims….
    How do you fix a HUGE SOCIAL problem? The insurers are seen as “deep pockets” ripe for the picking….

  6. Dans says:

    Did I mention those TV ads that show aggressive, hot driving in that new 500 HP monster machine ???

  7. Mike says:

    The people that are actually making comments don’t truly understand the product. Ontario tort laws are one of the worst in North America, with the laws in place no point of a lawyer taking small files as they can’t make an real money. We have a low pre judgement interest, a tough threshold and a crazy deductible. In BC even with changes a file is worth 40k, here would be worth zero. In majority of states their is no deductible or threshold and good pre judgement interest rate which gives insurer incentive to settle. We have these draconian tort laws to get good benefits, nope, the new catastrophic impairment is impossible to reach and insurers can’t be penalized with costs at the LAT. We have a system that reflects our govt, highly inefficient, creating lot of unnecessary positions which doesn’t benefit the consumer. Blame the govt, don’t blame the insurers, the lawyers, the body shops, the rehab, or the tow truck drivers. The insurers game the system as much as anybody else. The system have be profitable for everyone yet like everything else in Ontario it’s inefficient and stupid. Most average people don’t understand the system, and when they see b.s. written in Star they get influenced. Remember your rates are down 6 percent which is one latter per month, yet your product is 90 percent worst then 7 years back. Its not only what u pay but also the value that you are getting.

  8. John Bishoy says:

    The truth of the matter is that insurance companies are a monopoly here in Canada, there is no real competition period. You can test this by getting multiple insurance quotes using the same driver and vehicle profiles, you will find the differences between the quotes are peanuts, i.e. there is no real competition.

    Ah some says that insurance products are not the same as those south of the border, sorry to say but this is nonsense, do your math, even with differences in insurance coverage between US and Canada, the difference in premiums is not justified, this even without assessing road safety across the two countries with Canada having far safer roads than the US, this means less accidents, and less claims, therefore lower premiums.

    The scapegoat that is used by the auto insurance industry here that claims are on the rise is nonsense, the insurance company will have made many times profit over any claim you dare to file, I have paid over $32000 of premiums for an accident that cost $3600 dollars to fix 8 years ago.

    Who benefits from this monopoly, certainly the auto-insurers do. Why is the government allowing this monopoly? No obvious reason except for some mutual benefit otherwise why does not the government open the door for US auto insurance companies to offer auto insurance products here in Canada? This the real question.

    Not only is auto-insurance in Canada the most expensive but auto insurers keep increasing premiums at will without a check quoting nonsensical reasons for doing so, for example “your car is getting old now therefore premiums increased”, why on earth would the premium increase if the value of the insured car decreases and liability coverage remains the same, it should decrease not increase given that my car is a Toyota which got top reliability ranking against all auto manufacturers recently !!! Ah one smart person may say because as the car gets older it becomes a greater risk on the road, absolute nonsense, if an older car is roadworthy, it passes the road test and is licensed to be on the road, then it poses no greater risk than a newer car. Ah some other person say bad driving habits, but driving habits are far worse down the border, the premiums still stay low !! It all boils down to monopoly and those who are benefiting from the monopoly.
    A few years ago, the auto industry also had a monopoly on car sale prices with sale prices typically 45% more in Canada than the US, when customers started buying cars from the US, the Canadian auto industry retaliated by refusing to honor warranty for cars purchased from the US that until the auto consumers filed a lawsuit case and won which forced auto car dealers to drop prices as to make it not worthy anymore to buy cars from the US. We need to do the same thing to the auto insurance industry, that is the only way they will prevent them from abusing drivers through exorbitant premiums

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