Ontario auto premiums–and benefits–to drop by June 1
In Q1, FSCO's approved auto rate changes averaged out to -3.07 percent
For policyholders renewing on or after June 1, 2016, “the standard auto insurance policy you receive from your insurer or broker will have the new lower benefits—unless you act quickly and contact your insurance representative to purchase optional coverages,” FSCO’s website reads.
Key changes include combining and reducing medical and attendant care benefits for non-catastrophic injuries to a $65,000 total, and combining and reducing the same benefits for catastrophic injuries to a $1,000,000 total.
“Changes also included a prohibition on rating for certain minor accidents,” FSCO added.
This chart from FSCO breaks down the current policy, the new reduced policy and optional endorsements to increase coverage past the June deadline.
In the first quarter of 2016, FSCO approved auto rate changes for 50 insurers. They averaged out to a 3.07 percent decrease, primarily due to insurers complying with the government directive. This compares to a 0.15 percent drop in the fourth quarter of last year.
Insurers approved to decrease their rates include Northbridge General Insurance (-25.51), AIG (-5.22), CAA (-7.76), Echelon (-8.29) and Intact (-3.08).
FSCO only improve rate increases for CUMIS General Insurance Company (8.99), and Nordic Insurance Company of Canada (0.01).
“If you want to maintain the level of coverage that you had previously––or close to what you had previously, or close to what you paid before––you’re not going to see a reduction to your premiums,” Brian Hisey, a broker at Ledoux, Lew & Patterson in Mississauga, Ont., told CityNews. “You’re definitely going to get less coverage starting in June, at a slightly lower cost.”
But IBC spokesperson Celyeste Power defends the changes.
“Ontario has some of the highest auto insurance premiums in Canada and that’s because the insurance product is the richest in Canada,” she says, pointing out that other provinces don’t even offer some of the benefits available in Ontario.
“These changes allow consumers a greater choice in coverage,” including lower interest rates for monthly premium payments and reducing from six months to four weeks the waiting period for people who are not working to receive benefits.