Liberals Missing Target On Lower Auto Insurance Premiums

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“Our government is working to make auto insurance rates more affordable for drivers in Ontario, and the measures included in this legislation will build upon our efforts to continue to drive down costs,” said Orazietti. “We are committed to reaching our target of a 15% average decrease in insurance rates for Ontario drivers, and we have moved quickly to bring back legislation that was derailed by the opposition to help us achieve that goal.” – Sault Ste. Marie MPP and Minister of Consumer Affairs said that one year ago, but it seems the opposite is true.

During the second quarter of 2015, 26 companies actually increased premiums  according to a Canadian Press report.

Companies must apply to the commission for any rate hike and provide actuarial proof it is needed, said Ralph Palumbo of the Insurance Bureau of Canada.

“Some companies have asked for rate increases because they need those increases to cover their costs,” Palumbo said in an interview.

“Now I know that people may not believe that, but the regulator has looked at those rate filings and they’ve agreed that rates have to go up in many cases because the costs in the system are not coming down.”

The government had announced in April that premiums were down 0.95 per cent in the first quarter of this year and had been reduced an average of seven per cent since the summer of 2013.
The New Democrats had demanded the Liberals promise the 15 per cent auto insurance rate cut in exchange for supporting the 2013 provincial budget, avoiding the defeat of the then-minority government.

“Kathleen Wynne promised rates would be heading south, instead they’re heading north,” said NDP critic Jagmeet Singh. “She doesn’t seem to know whether she’s coming or going when it comes to keeping her promise of lower insurance rates.”

They never intended to follow through. They had no plan to achieve their target.- Vic Fedeli, PC finance critic
“I know it’s not 15 (per cent), it’s six-and-a-half,” said Palumbo. “But that’s not insignificant.”

A statement from Finance Minister Charles Sousa said regulatory changes passed in the spring will help lower costs for insurance companies, giving them room to reduce premiums even further.

“Our plan to tackle auto insurance fraud and reduce costs is working, but we want to go even further,” said Sousa. “We will continue to work on behalf of Ontarians to make premiums more affordable while still providing support and protection for all Ontario drivers.”

The Insurance Bureau said auto premiums in Ontario are 45 per cent higher than Alberta’s and about twice as high as those in the Maritime provinces.

with files from Canadian Press