Ontario will fall short of its promise
to cut auto insurance rates 8 per cent by next month, Finance Minister
Charles Sousa acknowledged Tuesday as average premiums inched 0.22 per
cent higher in the second quarter.
Premiums are now down
5.44 per cent since the government improved efforts to tackle fraud and
promised a larger 15 per cent cut by August of 2015, Sousa said as he
reintroduced legislation to cut costs for auto insurance companies and
crack down on price gouging in the towing industry.
That 15 per cent cut would be worth an average of $225 annually.
Sousa advised
motorists feeling the pinch of higher rates to “shop around” and blamed
the Progressive Conservatives and New Democrats in the last minority
parliament for stalling efforts to pass the bill first proposed last
winter.
“It’s unfortunate the opposition delayed it and delayed it and delayed it,” the finance minister told a news conference.
“We’re still going to be on track for the 15 per cent. We have to pass the legislation as soon as possible.”
Progressive
Conservatives support the legislation but want amendments to improve the
dispute resolution mechanism between motorists and insurers, said
Nipissing MPP Vic Fedeli, accusing Sousa of going too far in the blame
game because not enough has been done to combat insurance fraud.
“It was everything but the dog ate my homework…they have nobody to blame but themselves.”
The Financial Services
Commission of Ontario reported Tuesday that five companies with a total
market share of 14.5 per cent had new rates approved with an overall
impact of 0.22 per cent across the system for the province’s nine
million motorists.
Two companies lowered
costs for drivers by one percentage point but another, Security National
Insurance Company, boosted premiums 4.19 per cent.
Ralph Palumbo of the
Insurance Bureau of Canada said that was likely to make sure Security
National has “enough money to pay the claims” and Sousa suggested its
rates were “well below the cost of other companies.”
New Democrat MPP
Jagmeet Singh for Bramalea-Gore-Malton said many drivers are still
seeing increases or won’t see promised reductions for months when their
new billing periods begin.
“Claiming that there’s
a 5 per cent reduction is ludicrous,” he told reporters. “People are
feeling pinched…we’re paying the highest rates in the country.”
He said Sousa has a long way to go to meet the 15 per cent target, set in the spring of last year as a condition for NDP support of his budget.
“I think this will be another promise made, promise broken.”
The proposed auto
insurance legislation, aimed in part at settling disputed auto insurance
claims faster to reduce administrative costs and licensing of accident
rehab clinics, is being combined with another bill to regulate towing
and vehicle storage, giving consumers — who have often just been in car
accidents — more rights in dealing with tow truck operators.
Towing companies would
have to post prices, accept credit cards for payment, provide itemized
bills and notify motorists immediately where vehicles have been towed.
“We’ve had concerns raised,” said Consumer Minister David Orazietti.
Palumbo said the
measures will help cut costs for insurance companies and make lower
premiums possible in an industry where a number of firms have already
posted average rate reductions.
“We’re months behind.”
Source: http://www.thestar.com/news/queenspark/2014/07/15/ontario_will_miss_target_of_cutting_auto_insurance_rates_8_per_cent_by_august.html
Source: http://www.thestar.com/news/queenspark/2014/07/15/ontario_will_miss_target_of_cutting_auto_insurance_rates_8_per_cent_by_august.html