Ontario Auto Insurance Proposals in Budget to Reduce Costs, Regulations

In front of the Ontario Legislature yesterday, Vic Fedeli, Ontario’s Finance Minister, delivered his first Budget. The sustainable and comprehensive plan will balance the budget in 5-years, eliminate the deficit and it introduces no new taxes. The government will provide an estimated $26 billion in relief to individuals, families and businesses.  And, part of the plan is a people-focused approach to government.

Putting Drivers First

The 2019 Ontario Budget is introducing a blueprint, Putting Drivers First.  This comes at a time when driver frustration and insurance rates are at record highs in Ontario. The Progressive Conservative government finds Ontario’s auto insurance industry, "expensive and convoluted".

Sweeping reform of the broken system will lower rates and raise market competitiveness. Suggested proposals will give drivers more options for automobile insurance coverage. They will also have more control over their auto insurance rates. That’s from the release the government gave in fiscal budget talks yesterday.

More Help for Injured Drivers

Proposed changes for drivers injured in accidents include:

  • Allowing carriers to grant discounts to drivers who agree to a credit check.
  • Allowing carriers to grant discounts for drivers who commit to using their preferred healthcare providers and preferred auto repair shops for claims.
  • Implementing a new, Driver Care Card that will ensure faster access to necessary care and will help improve the claims process.
  • Confirming policies cover necessary treatments. Giving drivers a cash settlement option (if applicable).
  • Bringing accountability to injury claims through reformation of medical assessments.
  • Providing treatment access for injuries and providing mental health services.

Additionally, the Province is reverting back to a default benefit. The benefit will now be $2 million for catastrophic injuries. This was reduced 3 years ago to $1 million.

Proposals to Fix a Broken System

Ontario is working with the Financial Services Regulatory Authority of Ontario (FSRA). This is an independent regulator that is addressing ways to limit insurance fraud. New regulations, data analytics and online claims will all help to reduce fraud.

The Finance Minister said, "When it comes to driving, it is clear that Ontario's auto insurance system is broken - and drivers deserve better. That is why our government is making transformative changes to the province's auto insurance system."

Making Insurance More Affordable and Accessible

With responses from 51,000 residents, the Province is making insurance more affordable. The FSRA's proposed steps will improve the auto insurance market. And, the measure will give more money back to drivers.

The proposals include:

  • Helping insurance companies offer more options and discounts. Innovative products will include pay-as-you-go insurance plans.
  • Reducing red-tape by improving insurance regulations.
  • Charging higher penalties to reduce court-related activities and fraud.
  • Providing drivers with electronic proof of insurance. This step will replace pink slips as insurance coverage.
  • A private member’s bill will end driver discrimination based on postal codes.

Care Not Cash - A Win with Drivers

The Government's proposal to put drivers first is welcoming. Better allocation of insurance resources to treat accident victims was addressed by David Marshall in his 2017 report. Hundreds of millions of dollars went to pay contingency fees for lawyers. But, these funds will now be used to protect drivers and reevaluating legal fee arrangements ensures agreement transparency and driver protection.

Kim  Donaldson, the Ontario vice-president of the Insurance Bureau of Canada stated it best. "Today’s announcement focuses resources squarely where they should be: on helping those injured in auto collisions recover. Auto insurance is complex, but the proposed changes clearly intend to make  the claims process simpler for consumers."

The Progressive Conservatives want to help reduce costs for Ontario motorists. The proposed changes will streamline auto insurance accessibility and coverage options. Driver Care Cards and electronic auto insurance are part of the innovative changes. The budget hasn't specified premium reduction totals or specific timelines. But, the good news is changes are underway to improve auto insurance rates and the claims process for drivers.