What drivers can expect with Ontario’s auto insurance reform
Ontario’s PC government recently revealed its plan to fix the province’s “broken” auto insurance and reduce premiums for drivers.
The sweeping plan includes changes aimed at increasing the range of options available to drivers, modernizing and making the claims process easier, creating increased competition between insurance providers and combatting fraud.
The initiative, called “Putting Driver’s First,” was introduced as part of the Ford government’s spring budget in April.
"When it comes to driving, it is clear that Ontario's auto insurance is broken, and drivers deserve better," said Finance Minister Vic Fedeli in his speech to the legislature.Ontarians pay among the highest auto insurance premiums in Canada, with drivers in the GTA typically facing the highest rates.
The proposed reforms are meant to give drivers access to a wider range of plans, including more access to à la carte-style coverage. Doing so, the PCs believe, will give drivers more power to reduced premiums through customized plans. At the time, it wasn’t clear what types motorists will be able to opt out of.
"The proposed reforms will give control back to drivers," according to the 2019 budget document.
Insurance companies will also be allowed to offer drivers new types of discounts. Examples include: if a driver agrees to a credit check, or to claim benefits through an insurance company's "preferred providers" of auto repair or health care services.
The province also revealed its plan to create Canada’s first Driver Care Card, which allows claimants to receive immediate access to treatment and care.
Following an accident, the card would be loaded with money earmarked toward insurance benefits, such as rehabilitation and physical therapy.
Fedeli has said the card will "streamline access to care by providing important information that will make the claims process easier to navigate."
The Tories say the new, centralized system will also make it easier to combat insurance fraud, since it will be easier to monitor which benefits are being claimed.
Ontario will also raise the default benefit limit for catastrophic injuries to $2 million from the current $1 million.
“Everyone is optimistic. By making things simpler, reducing some of the red tape and regulations that right now add costs, it will definitely have an impact in helping reduce costs,” Insurance Bureau of Canada director of consumer relations Pete Karageorgos told Yahoo Finance Canada.
The Ford government also wants more insurance-related transactions to be made possible online, including payments and general communication.
Drivers will also be allowed to use electronic proof of insurance instead of the paper proof that is currently required.
Karageorgos said the plan to allow such electronic communications will help meet customer needs.
The Tories are also pushing for an end to "postal code discrimination," which allows insurance companies to charge higher rates based on a driver's home address. The legislation has been proposed but not yet passed. The Insurance Bureau of Canada says it will take time to implement the announced changes.
“Auto insurance affects 10 million drivers in Ontario, so obviously it’s going to take some time,” Karageorgos said.