Reducing insuranceFile photo by Rick Madonik/Torstar Network
Almost three years after Premier Kathleen Wynne came to Brampton to promise a 15 per cent reduction in auto insurance rates, Ontarians are still waiting to see a dramatic drop in premiums.
Brampton Guardian
It was May 2013 when Premier Kathleen Wynne sat with Brampton resident Injum Bhutta in his living room surrounded by media cameras and reporters to spotlight the Liberal government’s budget proposal to lower the average auto insurance rate by 15 per cent in Ontario.
A few months later, the Liberals promised to reduce those rates within two years.
In November 2014, just months after securing a majority government at the polls, Bill 15, the Fighting Fraud and Reducing Automobile Insurance Rates Act, was passed at Queen’s Park.
Still though, almost three years after Wynne assembled the media in that Brampton home and promised an average 15 per cent cut to auto insurance rates, most Ontarians are still waiting for any dramatic fall in premium costs.
The Financial Services Commission of Ontario (FSCO), which sets auto insurance rates in the province, issued a report that showed approved rates decreased on average by 0.15 per cent in the fourth quarter of 2015.
For Bramalea-Gore-Malton MPP Jagmeet Singh, who is the New Democrat Party’s deputy leader and consumer services critic, the rate hasn’t dropped near far enough or fast enough.
“They (government) haven’t hit half the target,” Singh said of the average rate decline to date. “That’s unacceptable.”
He accuses the government of doing more to lower costs and raise profits for insurance companies than taking action to reduce premiums for consumers.
According to Singh, the Liberal strategy reduces costs for insurance companies in hope the industry passes those savings on to drivers.
“That’s simply not working,” he insisted.
The government has the power, through the FSCO, to set the rates, but is not using that authority to bring costs down for consumers, Singh said.
“When you have a product that is mandated by law… there’s an obligation on the government to make sure it’s affordable,” he remarked.
According to Mississauga South MPP and Ontario Finance Minister Charles Sousa, the government has made great strides on its Auto Insurance Cost and Rate Reduction Strategy, but there is still work to do.
A spokesperson in his office pointed out that last spring the government passed legislation that requires insurers provide discounts to drivers who install winter tires on their vehicles. Also, in June, the interest rate charged on monthly premium payments will be cut by more than half and premium increases will be prohibited for certain minor at-fault accidents.
“Since our government has made reducing auto insurance rates a priority, auto insurance rates have decreased 7.1 per cent,” Sousa noted in a statement sent via email.
He added the government is committed to reducing auto insurance rates in a way that is fair and practical.
“The auto insurance industry must continue to play a role as well, by being more competitive in processing claims and employing efficient practices to lower costs and enable faster claim payments,” he said.
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