Will you get a 15% reduction in your auto insurance?
By now you may have heard about a 15% reduction in auto premiums as mandated by the Ontario government. We want to make sure that you understand what this can mean for you and your auto insurance rates.
At Secure Insurance, we offer some of the most competitive rates for your car insurance. And we always make sure to find out if you qualify for any discounts right off the bat.
What you need to know
In 2013 the Ontario Liberal government voted to support a motion by the NDP that called for an industry-wide 15% cut in auto insurance premiums. They agreed to a gradual reduction over a two year period.
So don’t expect a 15% reduction right away. The new auto premium reduction won’t take effect immediately. The government’s target is 15% on average over two years ending August 2015. They aim to reduce car insurance rates 8% by August 2014 and another 7% by August 2015.
You also need to know that not everyone is guaranteed to see a 8% reduction in their auto insurance rates by this August, although some may indeed see more than 8%. The 8% is an average. That means that not all consumers, regions or companies will be affected in precisely the same way. There are a number of factors:
- Your insurer. If your insurance company can demonstrate to the Financial Services Commission of Ontario that they can’t provide the reduction, they don’t have to. Say for example, a certain use may not be profitable for the insurer they may make a case to the government to not offer the reduction. That’s where we, your brokers come in. We will continue to work for you to find the best policy at the best price.
- Where you live. Insurance companies base their pricing by territory claims experience. That means that if there are more claims in a certain area, they can justify charging higher rates and some areas already receive reasonable rates which could mean a lesser reduction or none at all. Again, as your brokers we will shop around to find the best prices for your policy needs.
- Your individual characteristics. Because they’re offering “15% on average” over two years, some clients may experience higher reductions that others. Your history and policy needs will have bearing on this. Again, as your broker, we work with several different insurance companies to find you the best insurance for the best price.
The government needs to take action
The Liberal government believes that combatting fraud is the best way to reduce car insurance premiums. If the government implements the Ontario Anti-Fraud Task Force recommendations, insurance companies can then pass on the rate reductions you deserve.
Before the reduction can take place the government needs to consider the following factors:
- • Reducing the cost of fraud. Depending on the government’s success in reducing the cost of fraud, especially in health claims, the rate reduction, particularly in the second year could be compromised.
- • Licensing and regulation. The government is working on licensing health clinics and implementing regulations for the towing industry. These are some of the recommendations the Ontario Anti-Fraud Task Force made that are yet to be implemented.
In Ontario, there are a few differences in Accident Benefits and treatment costs when compared with other provinces and some items that could reduce costs are, for example:
- • The interest rates on Statutory Accident Benefits Schedule are not in line with other rates as its compounded monthly;
- • Guidelines need to ensure that people with minor injuries are dealt with in a timely and efficient manner;
- • Treatment costs would be reduced if individuals in Ontario weren’t able to receive treatment for 10 years which is considerably longer than in some other provinces;
- • A reformed arbitration process;
- • A replacement of the bodily injury threshold to allow for actual settlements and possibly even settlements at smaller amounts
What can you do?
As a voter, encourage your politicians to try and fix the fraud problem ASAP. The faster they deal with this problem, the faster premiums can be lowered.
Talk to your insurance broker at Secure Insurance. Ask questions about where you live and your individual situation to find out more about how your auto insurance rates will be affected.