View Desktop

Budget to set target of 15% drop in auto insurance rates

Premiums to be cut "as quickly as possible," finance minister says

Published May 1, 2013

TORONTO – Thursday’s budget will set a target for auto insurance premiums to drop by 15 per cent on average, but that doesn’t mean all Ontario drivers will get the same amount of relief on their insurance costs.

It’s also unclear when drivers will start seeing their rates drop, Finance Minister Charles Sousa acknowledged Tuesday.

“My proposal would be to maintain some flexibility, so that we can achieve those targets as quickly as possible,” he said from a Canadian Tire garage in Toronto.

“But we need to ensure we have oversight and that we work collaboratively with the industry and find ways to implement those targets as quickly as possible.”

The minority Liberals’ latest pre-budget announcement is widely seen as a sop to the New Democrats, whose support is needed to pass the budget and avoid an election.

On their list of demands is a 15 per cent cut to premiums across the board within a year through Ontario’s insurance regulator.

But that’s not exactly what the New Democrats got from Sousa.

The proposed legislation will have “some teeth” so that the province is monitoring reductions in claim costs and making sure that the savings are passed on to drivers, he said. But it’s a “complex problem” that requires that the government work with insurers.

Claims in Ontario are ten times higher than elsewhere in Canada, Sousa said.

“That’s just not acceptable,” he added. “So we need to deal with those things effectively. That may take time.”

The draft legislation would require insurers to offer lower premiums to people with safe driving records, Sousa said.

It would also expand the provincial insurance regulator’s investigation and enforcement authority to ensure that insurance companies are passing on their savings to drivers.

To help crack down on insurance fraud — which the insurance industry says is the main driver of high rates — Sousa is promising to give the Financial Services Commission of Ontario the authority to license and oversee health clinics and practitioners who bill insurers.

Post a Comment

Your email address will not be published. Required fields are marked *

*

Your Comment