Jacking up auto premiums

NDP Leader Andrea Horwath is accusing the insurance industry of jacking up auto premiums to compensate for the 15 per cent reduction introduced in the budget earlier this year.

In the legislature Monday, Horwath offered examples of motorists receiving significant increases when their situation hasn’t changed, including Hector Ferriol, 69, of Bramalea, whose annual premiums jumped to $1,700 from $1,350.

“That’s more than a 20 per cent increase. What does the premier have to say to drivers like Hector who are seeing their premiums go up rather than down?” she asked Premier Kathleen Wynne.

“The premier is helping insurance companies maintain generous guaranteed profits,” she said.

Said Wynne: “We will continue to work with the industry. It is absolutely our intention to reduce rates by 15 per cent on average. That’s the target; that’s what we will aim for.”

The government has promised to phase in the reduction over two years while bringing in other initiatives like curbing fraud, but Horwath said that, in the meantime, the insurance companies are moving quickly to fill in the gap before the axe comes down.

“When people were promised double-digit reductions and they’re seeing their double-digit increases, they feel like they’re getting played by the Liberals and insurance companies, and I don’t blame them,” Horwath told the Star later.

Peter Karageorgos, a spokesperson for the Insurance Bureau of Canada, said it is “nonsense” to suggest there are widespread premium increases because of the government-mandated cut.

“For the first two quarters of 2013, the trend is slightly downward,” Karageorgos said, adding that increases people are receiving now may have been approved months ago.

“The challenge is you can claim companies are jacking up rates in the space of one sentence, but to defend that . . . takes more time than people are willing to devote,” he said.

Ferriol, a 69-year-old retired construction worker, told the Star all he knows is that he drives a 2000 Honda Accord worth about $600 and his insurance climbed by 20 per cent. He said he has had no claims and no ticket within the past four to five years, adding the last one was for going 10 kilometres over the speed limit.

“They are full of excuses; there is nothing specific,” he said, other than the fact he lives in an area of the GTA infamous for auto insurance fraud.

“That is not my problem. . . You can’t penalize everybody for one group of people,” Ferriol said.

_{Source: thestar.com  By: Richard J. Brennan Provincial Politics, Published on Mon Sep 23 2013}