Canadian Underwriter

Ontario wants to hear from consumers about how to lower auto rates

January 9, 2019   by David Gambrill

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The Ontario government is inviting drivers and consumers to share their views on how to lower the province’s auto insurance rates, part of a broader initiative on auto insurance reform.

“The previous government’s failed system of stretch goals on auto insurance is clearly broken,” Ontario Minister of Finance Vic Fedeli said in a release addressed to consumers announcing the new public consultation process. “Auto insurance rates in Ontario are among the highest in the country, and action is needed. We want to hear directly from you on how to improve the system.”

Comments can be submitted up to February 15, 2019. Consumers can share their views here.

Fedeli’s remarks refer to an attempt by the former Liberal government to require the province’s insurers to provide a 15% rate cut to Ontario drivers by August 2015. The minority Liberal government made the promise in 2013, effectively gaining the support of the opposition NDP to pass its budget at the time.

After the majority Liberal government of Kathleen Wynne was elected in 2014, the government eased off its requirement for a mandatory 15% decrease, calling it a “stretch goal.”

Economical Insurance was among few insurers that actually did offer the mandated 15% decrease – with lingering financial effects. Focusing only on its personal auto results, the company reported to Canadian Underwriter last year that it lost $1.21 in 2017 for every auto premium dollar it was taking in. The company filed for an auto rate increase in the Summer of 2017.

In the latest available statistics from Insurance Bureau of Canada (IBC), auto insurers collectively spent $1.02 on claims for every dollar or premium they were raising for Ontario auto in 2017.

Rates approved by the Financial Services Commission of Ontario (FSCO) in 2017 reportedly showed an average rate decrease of approximately 8%.

Ontario’s Putting Drivers First consultation will coincide with a review of Ontario’s auto insurance rate regulation system, jointly conducted by the Ministry of Finance and the Financial Services Regulatory Authority of Ontario, as previously announced in the 2018 Ontario Economic Outlook and Fiscal Review.

In addition to the public consultation process, the province’s multi-prong auto reform effort announced thus far includes:

  • working with Ontario PC MPP for Milton, Parm Gill, on a private member’s bill that, if passed, would not allow insurers to rate the risk of drivers simply based on where they live
  • modernizing the auto insurance sector to include electronic communications and electronic proof of auto insurance
  • moving toward full electronic commerce, similar to what is already provided by other financial institutions today, including banks and credit unions.

Ontario auto insurers are encouraging Ontario drivers to take up the province’s effort to hear consumers’ stories.

“We hope that this process encourages constructive feedback to support positive changes to auto insurance for Ontarians,” said Kim Donaldson, IBC’s vice president for Ontario. “We have been calling for changes to how auto insurance is regulated for years. The province’s auto insurance system is outdated and Ontario drivers pay too much for their insurance. We believe there is a better approach.”

“The government looking at auto reform is certainly well-needed,” said Colin Simpson, CEO of the Insurance Brokers Association of Ontario (IBAO). “I think engaging a public process and obtaining input into the existing product and suggestions on how it could be improved is a very commendable action on their part and the IBAO will be certainly engaging in that process.”

Canadian Underwriter asked if there is anything in particular IBAO would like to see. “What we’ve been advocating is a broad review of the auto product in Ontario rather than just picking on specific aspects of it,” Simpson said, noting that one aspect that has often being discussed is around territorial ratings. “Really, if we want to address the affordability of the product at large, we need to do a broad review of the product as a whole and that is where the government seems to be going, so we are very encouraged at this point.”

In a statement, Aviva Canada president and CEO Colm Holmes described the consultation process with consumers “a positive step towards meaningful product reforms.” He emphasized the importance of regulatory change — one that would allow insurers to adjust in a timely manner to changes in claims inflation and market demands.

“Aviva is committed to working with the government to create a more modern regulatory framework, which we have long championed on behalf of consumers,” Holmes said. “The single most important change we can make to benefit drivers in 2019 is regulatory reform that allows consumers more choice about the product they buy and more options to help them save money on premiums.”

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25 Comments » for Ontario wants to hear from consumers about how to lower auto rates
  1. Curtis says:

    I have an idea: get rid of the FSCO. There are enough competitors in the market for the insurance companies to compete among each other, this alone will drive down prices for consumers. I deal in Quebec ind Ontario, one of the reason’s auto rates are so low in Quebec is because we have a vibrant, free market economy. When will the government learn that they are sticking their nose where it doesn’t belong!

    • Mike Gignac says:

      As an Ontario resident who was seriously injured in auto accident in Ontario at the hands of a Quebec driver in 2003. I can tell everyone for certain that the system is broken!!! Almost a full 17 years after my accident which I suffered at the age of 28 my insurance company refuses to accept the proof presented by not just my doctors but their own doctors. On top of that they try to use reduction scales which do not apply to me based on the clear parameters set out in Ontario/Canadian law.
      Insurance is just that. A mechanism thats sole purpose is to protect the Insured. Primary or Secondary designation doesn’t matter when everything runs out and instead of these Companies taking responsibility for clients they are allowed to pass that responsibility to both branches of Government thus effectively placing the responsibility on Canadian tax payers. All this does is secure Insurance Companies holdings and protect their ability to make money no matter if a Global Financial Crisis occurs as in 2007/08. It is time for us to pay attention!! We all have to pay if we want to drive! Meaning we have no choice and neither should auto insurance companies!!!

  2. Gloria Dean says:

    How about Seniors insurance.i oay 100.00 per month for not leaving my yard ..winter tires….non smoker…
    Sole driver..under 6.000 miles per year and a 4 door…Its Discusting
    And a rip off …and they tell me its because my postal code starts with L …i have payed since i was 18 years old ….thats over 53 years and no breaks…. I see why so many drive uninsured there is no money in being honest….

  3. Rishi Singh says:

    The insurance industry should be reformed and one thing the industry should do is to make it mandatory to have cameras on vehicles. Secondly the law needs to be amended for at fault accidents ,hitting someone from behind .If a car cuts into to you and gets in front of you while driving and suddenly he has to stop the driver at the back cannot stop at such speeds .Why should one be convicted or penalized for the ignorance of another driver .There are many accidents that occur like this and the claims that go along with it is un heard off . Government should also consider ALL LEFT TURNS have an advance light.
    Thank You

  4. Rodney says:

    We need the industry to be more competitive.Open the doors for competition!! Have a better look at insurance adjusters ,the ones that get kick backs from body shops etc .

  5. Jane says:

    Dealing with the problem of where the buck stops in regards to safety issues, in particular manufacturers vs government regulation. In particular are the materials and engineering truly safe for consumers. With the amount of accidents I’d say no. What is needed is stricter government regulation and policing of this and drivers must abide by rules or forfeit their license. The chopshop a problem. Need trucks only lane. Slow down speed. More warning snow signs. Snow fences. Road closures adverse conditions. No skid tires. Etc.

  6. Carole Verhoeven says:

    Change the laws so that people don’t pay extra for other drivers mistakes and take away insurance from the trucking companies that have there drivers traveling in storms

  7. Laura Bailey says:

    How about the insurance companies allow the people who have been injured in car accidents to have the needed medical treatment they need instead of having to fight for it??

  8. Mike D says:

    It’s time to get rid of the extreme multiple million dollar rewards for those that are looking for a winfall. The lawyers take the Lions share of it.
    Time for real change!

  9. J says:

    About time. These legal thieves have had the people of Ontario bent over for years. We are forced to have insurance and fear to use it. For the wrath of what’s to come if you make a claim. How bout you model it after Quebecs system where it seems everything in that province is less expensive. Or start insuring Driver’s and not vehicles so that a citizen can own two or three different types of vehicles and not have to provide separate insurance for each. The person themselves would be insured no matter what they are behind the wheel of.

  10. Chuck says:

    The provincial government should rather work with the insurance companies and not the consumers that are helpless on this issue. The insurance companies collude among themselves to hike insurance premiums. The consumer has no option as there is no competition. Government should issue licenses to new entrants into the insurance industry. They should create some competition.


    I live in Brampton and I pay alot on premium. my friend also lived on Brampton but uses an address in Bradford Ontario. He pays less the half of my premium.

  12. ROB says:

    I would like too know why different body shops can order OEM parts for vehicles while others have to order after market parts????

  13. Jim Garner says:

    I am over 80, with 60 years of driving experience. My spouse is 19 years younger and has 30 years of driving experience. The Ontario govt requires me to take a special exam every two years to prove am competent to drive. My spouse does not.

    She has a no-fault accident record. I had one at-fault accident in 1960.

    Recently we changed the “principal driver” from my name to her’s. The insurance company promptly increased the premium on our car, explaining that her 30 years’ experience (vs my 60 years) made her a higher risk.

    So, looking at the same set of facts, the insurance industry says I am the safer driver and she is the less safe. The government says the opposite.

    These two bodies need to talk to each other and arrive at the truth.

  14. Ian B says:

    Something that I feel needs to be addressed and I have felt this way for quite some time, is that it is painfully evident that in smaller towns, there are huge amount of individuals who live in major urban centers, like Toronto, who go to areas like Lindsay Ontario for intence, to obtain your drivers license. They do this, because they are not capable of driving in larger cities and pass their driving test, so the obtain a drivers license in smaller towns. This is a huge problem and I think it is only reasonable, that there needs to be some form of legislation put into place, whereby if you plan to get a drivers license, you must obtain a drivers license within a designated area in which you live.
    If you’re going to be driving on the 401 and the 404 and the 407 and the Don Valley Parkway and Lakeshore and so on and so forth… Then you need to be able to pass your drivers test driving on those exact highways. To go pass your drivers license on a rural 2 Lane Highway – only to spend 95% of your time in four or eight lanes of traffic makes absolutely no sense whatsoever.
    I’m sure if a few dollars were put into a study, it would prove very quickly, that people who are in accidents, who are relatively new drivers (within 5 years of obtaining their license), would probably show a clear correlation between those living in large urban centres and obtaining their drivers license in small towns versus those who obtained your licenses in major urban centres who live there.
    I have seen this on multiple occasions, in person. I strongly suggest you go to the Lindsay Ontario Ontario drivers examining centre and look for yourself… This is just one of countless driving examination centres, in rural areas, that are completely booked with wannabe drivers, who live deep within major urban centres.

    I very much agree that people should not be penalized because of their age. I think that there is a great deal of young men and women out there who are competent, rational in their decision-making, and relatively safe and good drivers… And they should not be tarred with the same stick as everyone else because of their age. I think everyone should be given at least one opportunity to prove that they realize their license is a privilege and not a right! However, I also understand that insurance companies are paying out hundreds of millions of dollars potential he in claims that are highly avoidable, if people only knew how to drive where they live. So in my opinion, legislate where you can obtain your drivers license in relationship to where you live, versus trying to find a Band-Aid to fix the problem after the fact.

  15. Mike price says:

    I moved two blocks in my city ( Barrie Ontario. ) And my insurance went up $ 240.00 this was very up setting and should no have happened. And do not understand how they can do this

  16. F says:

    Insurance rates according to area . Public insurance like Manitoba , less expensive than ont.

  17. Sajjad Ahmed says:

    Same issue of insurance auto rates was there in Saud Arabia, go learn from them what they did to lower it. Rates there are charged based on the driver’s experience and record of claims and not where they live. Discounts are mandatory to those who have no claim record each year starting from 10% first year to 50% in year 5. Get out from your shell and see what other countries who are less developed doing much better than you.

  18. T. Jay says:

    Well…. Get rid of no-fault insurance go back to old system. Make it mandatory for lawyers to work on retention basis in all auto claims, make it mandatory that the premiums can’t increase more than 5% in the given year…..Example:
    In Mississauga 2 vehicles 2 drivers both no claims no convictions same vehicles the premium went up 27% from last year ….Ridicules, in North Bay it would be 2% increase over last year…

  19. Don says:

    Introduce no fault insurance like Manitoba or Saskatchewan etc.

    But whatever we propose here nothing is gong to change in Ontario as the insurance industry will lobby to have it stay as is and they will succeed as usual.

    Liberal broke the promise to lower rates as will the Ford gang.

  20. Nick says:

    Make rates equal throughout the province, and only based on driver’s record, not the area where they reside. Cost to insure all the automobiles in the province should be equally divided among all drivers with a variable 50% increase according to driving record.

  21. donna mcphail says:

    #1… stop the right to sue for minor injuries…most of the claims are fabricated and fraudulent….ruthless lawyers take the biggest chunk of the ‘reward’ and it cost all insureds a lot of money because it takes time and effort and money to fight these claims…and they are still paid out
    #2 Stop the fraud …..fake injuries, fake claims to rehab ‘professionals’, doctors and facilities for the rehab. It is disgusting that these professionals lower themselves to the level to be so dishonest.
    #3 OHIP should take back the med rehab ….should be with them anyway!!
    #4 drivers should have to do a test with renewing their license every 5 years….written and driving….government would make money from this…and drivers would be more aware and the roads safer!!

  22. Nick10655 says:

    Donna mcphail,
    There is no right to sue for minor injuries. In fact it is extremely difficult to do so. Most lawyers don’t even want to bother with minor injuries.
    There is a $38,000 deductable against any judgement, so you lose that before you even start.

    Ins co’s hire private assesment clinics to review your case and don’t come back to very favorably for you. Most of these doctors are currently working in the medical system and freelance themselves out to these clinics for extra money.
    Everybody wants lower rates but it comes at a cost when your injured, even if it wasn’t your fault. Even if you die, the current payout to a spouse is 25k you have to sue them for more.
    Watch tvo The Agenda for a recent debate on this subject.

  23. Mario says:

    Rates should be based on driving record and past claims. The vehicle type and personal address should not be a factor. Good drivers should not pay for bad ones or scammers or for their choice of vehicle just because more people may have had more accidents in that model.

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