ORA News Release: Ontario Drivers Will Not Be Thankful For Proposed Changes To Auto Insurance

OCTOBER 14 FOR IMMEDIATE RELEASE

Those injured in auto accidents will have a much more difficult time getting the benefits they need if a proposed regulation is allowed to come into effect next month.

A seemingly minor technical change to the basic Accidents Benefits that dramatically reduces the interest rate payable by insurers on disputed claims will in fact have far reaching consequence for buyers of auto insurance, says Nick Gurevich, of the Ontario Rehab Alliance (ORA).

“By reducing the penalty that insurers pay for inappropriately denied claims this proposed regulatory amendment will create a financial incentive for insurers to deny every claim for benefits. It will further impoverish legitimate claimants trying to get the benefits they paid for when they purchased their insurance.” says Mr. Gurevich.

Currently, insurers must pay an interest rate of 12% per year for claims that have been inappropriately denied. The current proposal will see this interest rate reduced to 1.3% per year which is well below insurers return on capital invested. The authors of the original regulation recognized the importance of checks-and-balances in a system where the insurers are financial Goliaths facing off against their injured customers, and employing every possible strategy to retain and invest cash reserves rather than pay out on claims. A healthy interest rate is intended to discourage insurers from arbitrarily denying claims or stalling on treatment and settlement.

“The increased number of benefit denials will also flood and overwhelm the already broken dispute resolution system which the government is currently trying to fix through the introduction of Bill 15”, says Mr. Gurevich.

The ORA says that this change follows on the heels of multiple pro-insurance, profit-driven decisions which according to the General Insurance Statistical Agency (GISA) have resulted in record profitability for auto insurers in the past three years.

The ORA is calling on the government to act decisively and protect motor vehicle crash victims by striking this proposed regulatory amendment in its entirety.

MEDIA CONTACT:

Laurie Davis, Executive Director, ORA
Toll Free: 866-475-2844 GTA: 647-317-7244 Email: [email protected]ehaballiance.com

 

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