WHY AUTO INSURANCE IS SO EXPENSIVE

October 5, 2011

There are many documented cases of auto insurance fraud (see G&M article, here, and Project 92),  in Ontario, and fraud is a major contributor to our auto insurance premiums. Much of this fraud loss exploits the “Accident Benefits” portion of coverage. Accident benefits coverage is an extremely important part of insurance coverage, and is mandatory in all auto insurance policies in Ontario. To combat the rising costs of auto insurance in Ontario, the Government recently reduced the minimum limits required under this portion of coverage. This effectively meant that the Government felt that people claiming under the Accident Benefits coverage were not deserving of a reasonable amount of insurance (we must all be making fraudulent claims.) This is just another example of the Government spending a lot of time, energy and (our) money addressing the symptom and not the disease. Therefore, it is has been strongly recommended that you dig even deeper and make sure you buy-up the accident benefits coverage to a more reasonable amount.

But that is not all you can do. After spending a bundle to reduce insurance benefits, the Ontario Government has also come up with a website, here, describing the Auto Insurance Anti-Fraud Task Force, establish in 2011, which offers tools to citizens to identify and combat auto insurance fraud, here.

Unfortunately, we can’t just blame Ontario Auto Insurance premiums on Fraud. This decision by the Financial Services Commission of Ontario (FSCO), here, is a perfect example of where your insurance premiums are going. But before providing a very brief description of the event, it is important to know that we recognize this accident it a tragedy and we in no way intent to discount the severity of the injury or the pain and suffering of the individual or his family. An inebriated 62 year old man, riding in a luxury limousine coach, decided to do a headstand against a pole in the centre of the moving bus, to entertain his friends. The
insurance company denied his claim based on the action being outside “the ordinary and well-known activities to which automobiles are put.” They said his actions were “dangerous and excessive.” The FSCO arbitrator determined that based on the vehicle being a “party vehicle”, the actions of the injured party “fell within the normal use and operation.” There is no mention of actual insured losses, but it was a catastrophic injury, which are commonly in the millions of dollars.

There is probably not a lot we can do about the decisions of judges and adjudicators, but, instead of simply partaking in the apathetic activity of complaining about insurance premiums, we should at least try to educate ourselves on the detection and prevention of insurance fraud.

CAUTION: This article does not constitute a legal opinion or insurance advice and must not be construed as such. It is important to always consult a registered and truly independent insurance broker and a lawyer who is a member of the Bar or Law Society of the relevant jurisdiction with regard to this material before making any insurance or legal decisions. All material is copyrighted by Mitchell Sandham Inc. and may not be reproduced in any form for commercial purposes without the express written consent of Mitchell Sandham Inc. Anyone seeking to link this document from any external website must receive the consent of Mitchell Sandham Inc. by sending an e-mail to gshields@mitchellsandham.com.

 


MTO Launches Uninsured Vehicle Project

November 12, 2010

 McGuinty Government Improving Road Safety

Starting November 29, a new system will help keep uninsured drivers off Ontario’s roads by providing on-the-spot confirmation of insurance when drivers go to renew their licence plate.

In Ontario, it is mandatory for all vehicles to have valid insurance coverage. Currently, drivers are required to provide proof of insurance when renewing their vehicle’s licence plates. The new electronic verification system, will allow the province to confirm directly with the Insurance Bureau of Canada if a vehicle has mandatory insurance coverage during the license plate renewal process.

Partnering with the Insurance Bureau of Canada to check for valid insurance in real-time will make sure that drivers have insurance that is valid and up-to-date. It will also help keep Ontario’s roads safe by ensuring there are fewer uninsured vehicles on the road and less risk to other drivers.

For more information visit the Minitry of Transportation Ontario website or the Insurance Bureau of Canada website.

Ryan Mitchell, CAIB, CPIB
Vice President Commercial Lines
T: (416)862-1750
rmitchell@mitchellsandham.com


Changes to Auto Insurance Effective Sept. 1st, 2010

July 14, 2010

 

In an attempt to stabilize auto insurance rates in Ontario, the Ontario Government has introduced changes to the coverage’s within the automobile insurance policy.  As a result of these new laws you now have more choice when it comes to selecting your auto insurance coverages to best meet your individual needs. 

These changes will affect drivers buying a new policy or renewing an existing auto policy beginning September 1, 2010.

As of September 1, 2010, drivers will be able to:

•  Choose the insurance coverage that best meets their protection needs and budget
•  Customize their level of income replacement, medical, rehabilitation,
   attendant care, caregiver, housekeeping, death benefits and home
   maintenance coverage; and
•  Better integrate their auto insurance with private disability insurance
   coverage, or individual or group health insurance coverage.

We encourage clients of Mitchell Sandham Insurance Brokers to speak to their dedicated insurance advisor to review these changes and to select the coverages that meet your specific needs.  Speaking with a licenced insurance broker will help you make an informed decision regarding your auto insurance coverage.

Mitchell Sandham Insurance Brokers has created a checklist resource for our existing and new clients.  This checklist outlines the new limits of coverages that your auto insurance policy will have when it renews after September 1st, 2010.  The checklist also outlines the new options that are available to you.  Please call our office to speak with a dedicated insurance advisor at Mitchell Sandham to discuss these options.  We encourage you to make informed decisions and we are here to help you do just that!

To learn more about the auto insurance reforms, click on one of the links below for further references:

Dominion of Canada Insurance Company

Financial Securities Commission of Ontario

For further information regarding the changes to auto insurance and to speak to an independent broker, please feel free to call me directly.

Ryan Mitchell
(416)862-1750
Mitchell Sandham Group

CAUTION: The information contained in the Mitchell Sandham website or blog does not constitute a legal opinion or insurance advice and must not be construed as such. It is important to always consult a truly ‘independent’ registered insurance broker and a lawyer who is a member of the Bar or Law Society of the relevant jurisdiction with regard to this material before making any insurance or legal decision. All material is copyrighted by Mitchell Sandham Inc. and may not be reproduced in any form for commercial purposes without the express written consent of Mitchell Sandham Inc. Anyone seeking to link this site from any external website must seek the consent of Mitchell Sandham Inc. by sending an e-mail to rmitchell@mitchellsandham.com.


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