Approved auto Insurance rate filings in Ontario down in 2013 Q3
DAILY NEWS Oct 30, 2013
Private passenger auto insurance rate filings in Ontario approved during the third quarter of 2013 declined on average by 0.68%, based on the entire market, notes a recent notice from the Financial Services Commission of Ontario (FSCO).
The notice provides an overview of auto insurance rate filings approved by FSCO for the period ending September 30. The number of filings reviewed and the overall rate change for the Ontario market “may vary from quarter to quarter, based on updated information about claims costs, market conditions and other financial factors and the resulting impact that these factors have on the adequacy of an insurance company’s current rates.”
A chart of insurance rate filings approved for the July 1 to September 30, 2013 period lists 50 filings. The approved rate change for 43 of those is a reduction (ranging from -0.38 to -7.15), for two there is no change, and for five, there is an increase (ranging from 0.48 to 2.74).
The approved rate change for each insurance company is the average for that company, based on all the drivers it insures. The rate may change for an individual policyholder depending on several factors, such as the vehicle insured, where he or she lives and other risk factors, and choices made by the policyholder on coverages purchased and deductible or liability limits.
Most premium dollars collected by insurers go toward paying for claims for people injured in car accidents, FSCO reports in the notice. A graph – Claims Cost for a Typical Private Passenger Policy by Coverage – details the percentage of claims costs for accidents in 2012: third-party liability bodily injury, 39.5%; accident benefits, 26.9%; direct compensation and property damage, 15.1%; collision, 10.9%; comprehensive, 5.1%; uninsured auto, 1.7%; and family protection coverage, 0.8%.
“Consumers are urged to shop around for auto insurance. Ontario has a very competitive marketplace,” says the notice. “Prices for the same coverage vary based on each insurer’s claims experiences and the insurer’s rating system.”
The notice points out that the Ontario government’s 2013 budget included measures to reduce costs in the auto insurance system and, in August, the government enacted legislative and regulation changes.
Among the amendments were measures to address recommendations outlined in the Auto Insurance Anti-Fraud Task Force final report, released in November 2012, including the creation of a framework for FSCO to license health clinic business practices that provide services to auto insurance claimants.
“FSCO continues to work with government and stakeholders to make changes that will crack down on auto insurance fraud, benefit drivers by helping to lower premiums, increase road safety and ensure people hurt in auto accidents get the treatment they need to recover,” the notice adds.