NDP: Insurance companies hike rates ahead of mandatory rate reduction

NDP Consumer Services Critic Jagmeet Singh says some GTA residents are seeing significant increases in their auto-insurance rates despite clean driving records.

“Just a few weeks ago, this government finally committed to our NDP proposal to reduce auto rates by 15%. But recently I’ve heard from a number of people that they’re seeing their insurance premiums increase by 15% to 20% upon renewal. These are people with absolutely clean records and no claims whatsoever,” explained Singh during question period today.

The Bramalea-Gore-Malton MPP has been fighting for a mandatory reduction of auto insurance rates in Ontario. A modified version of his proposal was incorporated into the Liberal budget currently being debated.

“People in my community and across Ontario are paying some of the highest premiums in Canada. These are tough times. Families are struggling to make ends meet,” said Singh.

“This government said that they will take our NDP proposal to reduce auto insurance rates by 15% to make life more affordable,” said Singh. “How many times will this government allow insurance companies to increase premiums before they actually implement that 15% reduction?”

http://www.oyetimes.com/news/canada/43335-ndp-insurance-companies-hike-rates-ahead-of-mandatory-rate-reduction

Auto insurance rates rising as Liberals promise cut: NDP

Read more: http://toronto.ctvnews.ca/auto-insurance-rates-rising-as-liberals-promise-cut-ndp-1.1300412#ixzz2UsK95cmV

Honest men and million dollar fraudsters: The heroes and villains of car insurance

By Mike Goetz, Metro Canada

There’s been lots of talk recently about the high cost of vehicle insurance. A report by the Fraser Institute concluded that provinces with “government insurance monopolies” tend to have higher premiums than provinces with “private sector, competitive markets.”

But Ontario has the highest premiums of them all — higher than provinces with so-called insurance monopolies. If the Ontario NDP gets its way, the Ontario Liberal Government will include some insurance cost reform in its soon-to-be-tabled Budget.

Through the Insurance Bureau of Canada (IBC) the private insurers have just mounted a public campaign, to explain the Ontario discrepancy. Its argument, backed by the Fraser Report, is that most of the money is going to the wrong places — hidden legal fees, fraud, and excessive assessments by for-profit medical facilities.

One criminal outfit called “Project 92” was estimated to bill $25 million in fraudulent insurance claims. Its ringleader, now behind bars, staged fake accidents and had corrupt accomplices in every link of the repair and medical chain, who over-billed for everything.

When vehicles come together in noisy and expensive ways, it’s not always the worst in people that shows up; sometimes it’s the best. At least that’s been my experience.

Over the years I’ve had three parked cars that have been hit by somebody when I wasn’t around, and in every instance, they left a note, and eventually made proper restitution.

The most memorable of these occasions was the latest one, involving the guy that delivers our morning paper in his old van. I guess on that fateful morning he jumped out of his van without first putting it into “park.” It went down the street, driverless, first careening off our Mazda6, then settling into a Hyundai Sonata owned by my neighbour Tim.

When Tim and I went out in the morning, we both found notes on our cars, just listing a phone number to call about the damage. My left mirror was gone, and a fender was creased. Tim’s car was a bit worse.

I eventually got hold of his teenage son, who explained that his father, being a recent immigrant, couldn’t speak English too well. Both of them would come around on Saturday to make arrangements. I offered to call my insurance company. Maybe he just could pay the deductible? I was a bit worried that his body shop of choice might not do the job as properly as my body shop of choice.

He said I should not worry at all about getting my car fixed, or getting it fixed properly, because his father was a very honest man. I distinctly remember how he said all this. He said it slow and with no inflection, like he wasn’t trying to sell me anything, just stating a fact.

The cars were fixed promptly and properly. I can’t imagine how many days delivering newspapers it took to pay a body shop to fix both cars that way, but probably a few.

http://metronews.ca/drive/688016/honest-men-and-million-dollar-fraudsters-the-heroes-and-villains-of-car-insurance/

NDP accuse Liberals of falling down on vow of lower insurance rates

610 CKTB News, 5/29/2013

Daily News: Ontario judge orders part of defence statements be removed in case against auto insurance agents

Ontario judge orders part of defence statements be removed in case against auto insurance agents

An Ontario court has ordered that two paragraphs be expunged from a statement of defence filed by Allstate agents being sued by a policyholder who alleges they failed to advise him of the option of purchasing more than $1 million of auto coverage under a family protection endorsement.

Bryan Trottier, who was seriously injured in an accident in 2009, had purchased $1 million on the Ontario Policy Change Form (OCPF)44R family protection endorsement.

That endorsement is designed to protect policyholders or their family members to the same limits as their third-party liability policies if they are involved in an accident, where they are not at fault, with someone who carries less insurance, no insurance or is an unidentified driver.

Court records indicate Trottier, 32, suffered a traumatic brain injury, will require 24-hour attendant care for the rest of his life. He is suing the other motorists, who are underinsured.

However, he will not be indemnified by his Allstate family protection policy for his unpaid damages because the limits of Trottier’s family protection policy do not exceed the third-party liability limits of the owner of the other vehicle.

Trottier is also suing two Sudbury-area Allstate agents, claiming they “failed to warn (Trottier) that he may not have sufficient underinsured motorist coverage in the event that he sustained a serious or catastrophic loss arising from a motor vehicle collision.”

Trottier’s statement of claim also alleges that the Allstate agents “failed to advise” him “of available automobile coverage, and in particular, the availability of more than $1,000,000.00 in insurance coverage.”

For its part, the Allstate agents claim they advised Trottier “of the purpose of third party liability and family protection coverage and of the option to purchase $2,000,000 policy limits for those coverages.”

None of the allegations have been proven in court.

In a decision May 24, Madame Justice Louise Gauthier of the Ontario Superior Court of Justice ordered the defendants to strike two paragraphs from their statement of defence. Her decision was on a motion to strike those paragraphs, not on the merit of Trottier’s claims.

The defendants stated that as of the date the plaintiffs purchased the policy, more than 90% of auto insurance clients in Ontario elect to buy $1 million in third party liability/family endorsement. The statement of defence added that when Trottier’s accident occurred in 2009, about 90% of Ontario auto customers were still buying $1 million in coverage.

It was those statements that were ordered expunged.

“Knowing what most Ontario motorists did in the past will not help the trier of fact determine what this particular motorist did,” Judge Gauthier wrote in her decision. “Additionally, the statistic does not refer to whether or not those motorists who opted for lower insurance coverages were nevertheless advised of their options by their insurance brokers, which is at the heart of the matter in question.”

Court records indicate Trottier had been buying insurance from Allstate since 2003.

“The defendants plead that at the time of each policy renewal the plaintiff was advised to inquire about the coverages available to discuss with his Allstate agent his specific needs but did not respond to same,” Judge Gauthier wrote.

Trottier alleged in his statement of claim that the Allstate agents “failed to recommend … given his age and income earning capacity, the appropriate level of insurance coverage available under the policy.”

For their part, the Allstate agents claim Trottier “had no desire to increase his insurance costs by any amount and in fact was looking for ways to reduce same …”

Disability insurance: More delay and deny benefits tactics

BY ALAN SHANOFF ,TORONTO SUN

SATURDAY, MAY 25, 2013 06:35 PM EDT

Penncorp Life Insurance Company has a mission statement. According to its website, Penncorp “provides financial security by specializing in simplified, personal disability insurance and financial solutions that fit the unique needs of Canada’s self-employed, skilled tradespeople and other individuals who do not have easy access to traditional insurance and financial products.”

It’s an admirable mission statement but they sure fell short of the mark in their handling of Avelino Fernandes’ disability claim. In fact they fell so short that Justice P.B. Hambly of Ontario’s Superior Court of Justice recently awarded Fernandes $100,000 as aggravated damages and $200,000 as punitive damages in addition to ordering them to pay six years of back payments and $212,130 in legal fees.

Justice Hambly concluded Penncorp’s conduct was “highhanded,” “malicious,” “arbitrary” and “reprehensible” as they delayed and denied payments in order to take advantage of Fernandes’ economic vulnerability or to obtain settlement leverage.

Fernandes was a bricklayer. To protect himself he purchased disability insurance that would pay benefits of $3,000 per month provided he met the definition of total disability. Although he owned his own company he worked full-time laying bricks. He worked 10 to 12 hours a day, six or seven days per week until he suffered two accidents — falling eight feet off a scaffold and three feet off a trailer — in late 2004.

He attempted, but was unable, to work as a bricklayer in 2005 and his company went out of business.

Medical evidence showed lumbar disc disease, right sciatica, cervical disc disease, chronic pain syndrome and other ailments. He was physically incapable of performing the duties of a bricklayer and indeed Penncorp made disability payments for about six months until they viewed a surveillance video showing Fernandes working in his backyard for about 90 minutes. He was observed shoveling some material into a pail and wheeling it into the backyard in a wheelbarrow. He removed tools and other items from the backyard and lifted the wheelbarrow and a wooden skid into the back of a trailer. That was enough for Penncorp to conclude, wrongly, that Fernandes was not entitled to further disability payments.

In total, Penncorp’s investigator conducted surveillance for about 140 hours over 19 days during a span of about four and a half years. But none of the surveillance evidence even came close to establishing that Fernandes was capable of performing the arduous duties of a bricklayer. What they established is that Fernandes could perform light work for short periods of time. What they didn’t show and what surveillance can never show is the pain being suffered during or after the work, the pain medication taken or the number of bad days that followed a short period of activity.

In most disability policies the test for entitlement for benefits during the first two years of disability requires the insured person to be incapable of performing the essential duties of his own occupation. Following the two year period entitlement is based on a definition that requires the insured to be incapable of performing the essential duties of any occupation for which the insured is reasonably suited, taking into account the insured’s education, training or experience.

While Penncorp paid Fernandes’ entitlements for the first two years of the disability, albeit with most of that paid only after commencement of a lawsuit, Penncorp refused to make any further payments, claiming Fernandes was capable of starting his own bricklaying or painting company or becoming a bricklaying supervisor. But Justice Hambly felt the evidence was clear that none of these were realistic based on Fernandes’ medical condition and intellectual abilities.

Facing a rejected disability claim and having to sue for contractual benefits is traumatizing for most. It’s good to see that judges are penalizing insurance companies for violating their contracts, although Penncorp got off easy having to pay only $300,000 in punitive and aggravated damages. 

IME companies must focus on client service, diversify in face of regulatory changes

DAILY NEWS May 22, 2013

Ongoing regulatory reform, particularly related to Ontario auto insurance, along with general industry consolidation, means Canadian independent medical evaluation companies must diversify their offerings and continue working with stakeholders, a new whitepaper from Cira Medical Services argues.

Reforms in 2010 to Ontario’s Statutory Accident Benefits Schedule (SABS) have already had an impact on the IME industry, the company says in its whitepaper, Emerging Trends in the Independent Medical Evaluation Industry.

Recent recommendations set out in the November 2012 final report from the Auto Insurance Anti-Fraud Task Force also mean the industry is poised for changes, Cira Medical notes.

Among the 38 recommendations in that report was creating a licensing and regulatory process for health care clinics that treat auto insurance claimants and invoice insurers. The report also said there should be greater emphasis on evidence-based approaches to medical assessments and that insurers should publicly disclose how they choose and assess medical assessment professionals.

“It is clear that to achieve these stated goals, IME service entities and their assessors will need to structure their future activities in a manner that allows for clear accountability and transparency,” the whitepaper says.

The most successful IME companies will be those that adapt quickly to new policies and procedures, and other results of ongoing regulatory reform, it argues.

IME companies must also adapt to ongoing consolidation in the industry, the whitepaper says. Like the property and casualty insurance industry in general, the IME industry has seen increased consolidation over the past few years.

One challenge from that has been insurance companies requesting national fee schedules from IME companies, the paper suggests. Streamlined pricing on a national level can be difficult because of fee caps and other regulatory issues that differ among the provinces, it notes.

However, IME companies can work on streamlining their client service processes and other internal processes to remain successful, Cira Medical argues.

Companies can also work on diversifying their services into new markets and invest in their internal technology platforms to better manage information, the paper suggests.

“Whatever the outcome of these efforts, it remains in the IME industry's best interest to promote the highest quality practices possible, and this can only be achieved through rigorous standards of service and innovation,” it adds.

“The future of the IME industry will favour those providers who not only possess the ability to adapt quickly to regulatory change, but can also respond to and event set industry trends.”

Can you afford 15% insurance discount?

Markham Economist & Sun

The Ontario Liberal Party wants to cut car insurance rates by 15 per cent. Is that a good idea?

Ontario drivers need to make sure they are not getting cheaper insurance at the expense of reduced benefit entitlements.

Paying less money for the same thing is a deal. But a person may be ripped off when paying less money for even less benefits.

For example, cereal makers will put less cereal in boxes by shrinking their packages and then sell them at the same or lower price.

This trick tries to convince consumers they are getting a deal when they are actually paying more per bowl.

The Liberals have a track record of slashing drivers’ benefits under the pretext of lowering insurance rates.

In 2010, they limited “minor injury claims” to $3,500. Yet insurance companies have not reduced rates for most drivers; most are paying more than ever.

The goal of car insurance is to give us financial protection. Cutting our benefit entitlements destroys the entire purpose of requiring drivers to buy car insurance.

Ontarians cannot afford a 15 per cent insurance discount if it will cost them their benefits.

Rahul Soni

MARKHAM

Survey Shows Many Seriously Injured Auto Accident Victims Running Out of Benefits before Recovering

TORONTO (May 8, 2013) – A survey released today reveals the devastating impact of the 2010 auto insurance reforms on the recovery of many motor vehicle accident victims.

Premium relief will be welcomed by Ontario drivers but the rate reductions should be accomplished by addressing fraud in the system and lower insurer profits and not by further cuts to no – fault benefits says the Ontario Rehab Alliance. 

A survey of health care providers who treat auto accident victims, conducted by the Ontario Rehab Alliance, suggests that any further benefit reductions will cause more victims to run out of treatment funds before recovering. Currently, only 17 per cent of seriously but not-catastrophically injured victims attain their rehabilitation goals. This recovery rate is dramaticallyreduced from the 57 per cent of victims who attained rehab goals prior to the cuts made in September 2010.  The cuts amounted to a 70 per cent reduction in insured benefits that was not accompanied by lower premiums. 

Optional benefits, introduced at the time of the cuts to basic coverage, provide for higher levels of coverage. The Alliance believes that these optional benefits are over- priced and poorly understood by drivers. Very few drivers choose these, leaving most policyholders with inadequate coverage in the event they are seriously injured in an accident. 

“Many drivers are unaware of how little their auto insurance now covers and they are in for a big disappointment when injured” says Nick Gurevich, President of the Alliance.

The survey results also show a distressing decrease in the proportion of victims who are able to return to at least half of their pre-accident roles and levels of function following treatment. Only 31 per cent of seriously but non-catastrophically injured clients who were injured and treated after the 2010 accomplished this, as compared to 56 per cent under the pre-reform benefit structure. 

 “We certainly support reduction in the premiums paid by Ontario’s drivers and the fight to eradicate all fraud from our system, however, with the second poorest benefit system in Canada (and the poorest when it comes to minor injury) there is simply no room to offset reduction in premiums with any reduction in the benefit system without dire consequences to victims” adds Gurevich.

About the Ontario Rehab Alliance 

The Alliance represents approximately 90 companies and about 3,500 health care providers including physiotherapists, occupational therapists, speech language pathologists, chiropractors, psychologists, rehabilitation therapists, social workers, nurses, personal support workers and case managers. It is these individuals who are the primary providers of healthcare and rehabilitative services to Ontarians who are injured in automobile accidents.  Ontario Rehab Alliance members help victims of automobile accidents to put their lives back together and regain function and dignity in the aftermath of the 65, 000 crashes which affect  Ontarians every year. 

For further information, visit www.ontariorehaballiance.com

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To arrange interviews with Ontario Rehab Alliance President Nick Gurevich, contact:

Laurie Davis, Executive Director

Ontario Rehab Alliance

Toll Free 866-475-2844

Toronto  647-317-7244

New Brunswick’s higher cap for minor auto collision injuries to take effect July 1

DAILY NEWS May 9, 2013 3:50 PM

The New Brunswick government has announced that the raised damages cap for people suffering minor personal injuries from auto collisions will take effect this summer.

The new raised cap of $7,500 (up from $2,500) will take effect on July 1, the province’s Justice Minister and Attorney General Marie-Claude Blais announced in the legislative assembly Wednesday.

Beginning Jan. 1, 2015 the maximum amount will also increase in accordance with the Consumer Price Index for New Brunswick.

Along with those changes, the definition of “minor personal injury” has also been updated in the province’s Insurance Act

In a statement Thursday, the Insurance Bureau of Canada said the industry is committed to working with the provincial government on implementing the changes.

“IBC will work with the government and the insurance industry to ensure smooth implementation of the changes to the minor injury damages cap for New Brunswickers,” its statement said.

“A sustainable and stable auto insurance system must strike a balance between providing adequate benefits for the few people who make claims and affordable premiums for everyone who drives,” Steve Olmstead, manager of government relations with IBC, commented in the statement.

“The government’s decision to increase the minor injury cap changes that balance to provide more benefits that we hope will serve to benefit New Brunswick drivers,” he added. “We know that caps can work, and that caps are a fair and reasonable way to control claims costs and deliver affordable premiums for consumers.”

The previous $2,500 cap was created in 2003. In 2011, an Auto Insurance Working Group was formed to address the cap on personal injury awards, and in November of that year, the group released its final report. Its recommendations included proposed changes to the minor personal injury definition and increasing the personal injury award cap to between $4,000 and $6,000.

In June 2012, the provincial government tabled its own recommendations based on the working group’s report. It proposed increasing the cap to $7,500, more than the working group’s proposal, but on par with the cap in Nova Scotia.

The government also asked for public and stakeholder feedback on the amendments following its proposed changes in June 2012, and again earlier this year.