Insurance rate-cut pledge needs a deadline, critics say
The Liberal promise to reduce auto insurance premiums by 15 per cent is little more than bumper sticker politics, Tory Leader Tim Hudak says.
Thursday’s provincial budget called for an average reduction of $225 within a year or so of the provincial budget being passed.
“I think people are tired of this bumper sticker politics where you throw a number out there with no plan whatsoever to get to that. I think men and women of our province are going to see through that empty commitment,” Hudak said.
Ontario motorists pay the highest premiums in Canada, especially in the Greater Toronto Area that is plagued with auto insurance fraud.
“The cost is hard on people’s wallets but it also presents a drag on our economy,” Finance Minister Charles Sousa said.
“We are targeting a 15 per cent cut on average to auto insurance rates to help people with their cost of living and ease expenses,” Sousa told the budget news conference.
The budget premium provision is a major sop to the New Democrats, who insisted an insurance premium cut, among other things, was a condition of NDP support for the first budget of Premier Kathleen Wynne’s government.
But NDP Leader Andrea Horwath wasn’t entirely onside because of the vague timeline and whether the savings are achievable.
“This is one of the concerns we have. We see our proposals reflected but what we don’t see are any accountability measures … we don’t see any reference to how much and how much time it’s going to take,” Horwath said.
Insiders says the Liberals are finding it is one thing to say auto insurance should be cut by 15 per cent but an entirely different thing to do it.
A large part of the reduction initiative will depend on the government’s ability to tackle fraud in the system ranging from shady tow truck drivers and body shops to the health clinics that have popped up in strip malls across the GTA.
In January, the government approved regulatory amendments to address some of the reforms proposed by the final report of the Auto Insurance Anti-fraud Task Force in late 2012.
These amendments, which take effect June 1, will help curb auto insurance fraud by:
Requiring claimants to confirm attendance at a health clinic.
Making providers subject to sanction for overcharging insurers for goods and services and banning them from asking consumers to sign blank claim forms.
Requiring insurers to provide claimants with all reasons for denying a claim.
Providing claimants the right to receive a bi-monthly, detailed statement of benefits.
Claims costs skyrocketed between 2006 and 2010 when the provincial government dramatically trimmed accident benefits the insurance industry pays out. The NDP claims that move alone handed the industry a $2 billion windfall.