Toronto Sun: Ontario moves to lower insurance rates

BY ANTONELLA ARTUSO ,QUEEN'S PARK BUREAU CHIEF

Ontario is restarting auto insurance and tow truck legislation to control costs as some motorists see their insurance rates climb.

Ontario Finance Minister Charles Sousa Government and Consumer Services Minister David Orazietti brought back bills Tuesday that would address auto insurance rates by cutting dispute resolution and vehicle storage costs following an accident.

The Financial Services Commission of Ontario (FSCO) reported that auto insurance rates went up an average of 0.22% in the second quarter of the year, mostly due to a 4.19% increase allowed to the Security National Insurance Company which represents just over 7% of the market.

Sousa said his government remains committed to its goal of reducing auto insurance rates on average by 15% by next summer, and rates are already 5.4% lower as a result of Liberal actions.

Consumers whose rates are going up should “shop around” for a better deal, Sousa said.

“You can find better rates because it’s a competitive system,” he said.

Progressive Conservative MPP Vic Fedeli said a major insurer has left the market and more drivers have lost their coverage since the Liberals first unveiled their plan to bring down rates.

“We really want to get in and tackle the issue of (auto insurance) fraud,” Fedeli said.

NDP MPP Jagmeet Singh said fraudulent activities are a problem but are not the driving factor behind increased costs for motorists.

Insurance companies are making record profits thanks to changes in victim benefits and other measures but are not passing on those savings to their customers, he said.

Drivers are required by law to obtain auto insurance, yet the government is not taking concrete action through FSCO to force rates down, he said.

“Why can’t they legally also make it something that is affordable,” Singh said. “And why don’t they also use their tools of fiscal regulation to make it something that people can actually afford to purchase?”

Singh doubted the government could reach its goal of a 15% reduction on average in rates.

“We’ll try our best to achieve that,” Sousa said.

Federal legislation does not permit the province to take steps that would make insurance companies unprofitable, he said.

The two pieces of legislation proposed by the government would address costs faced by insurers.

Currently, vehicle storage companies are allowed a 60-day period to notify drivers if a vehicle is taken into storage after a collision, allowing expenses to rise for either the driver or insurer.

Orazietti said new legislation would allow for a shorter notification requirement.

The bill would also mandate the posting of prices where customers could see them before their vehicle is hoisted onto a tow truck.

Sousa’s auto insurance bill would streamline the accident dispute resolution system which he argued would reduce administrative costs.

http://www.torontosun.com/2014/07/15/ontario-moves-to-lower-insurance-rates