Fair & Just Society

Why Are Car Insurance Premiums So High?

According to a recent article on the Toronto Star's website, "Of all the provinces, Ontario is by far the most costly place to buy car insurance. A 2011 study by the Fraser Institute found that Ontarians pay an average of $1,231 annually for auto insurance compared with Quebecers, who pay the country’s lowest rate at $642."

(http://www.thestar.com/sponsored_sections/insurancehotline/2013/05/01/why-is-auto-insurance-so-costly-.html)

The article goes on to say that the Insurance industry blames massive fraud (of about $1.5 billion) for causing such high rates. I can tell from my personal experience that if you go to an autobody shop for a repair that they will quote one price if an Insurance Company is paying and another price about 50% lower if the customer is paying out of his own pocket. I have wondered for years why insurance companies have not cracked down on these bloated estimates.

The insurance industry also complains about massive fraud invoving the treatment of injuries from car accidents. Typical scams involve staged accidents where the allegedly injured drivers and passengers go to a physio or chiropractic clinic or other medical service provider who is part of the scam. The scammers are not really injured and they do not receive any treatment but these corrupt clinics bill the insurance company for months of treatment that is not provided. Then the clinic and the patients split the money received. Sometimes corrupt doctors and lawyers also facilitate this.

Again, since insurance companies are well aware of these scams, why haven't they taken any serious measures to curtail them. Apparently, these same companies can control fraud quite effectively in Quebec and other provinces.

I can only conclude that the insurance companies do not care how much repairs cost or how much is lost to fraud because the Ontario Government has allowed them to pass on these dishonest expenses to consumers through premiums instead of the insurance companies implementing effective anti-fraud measures.

I feel profoundly cheated and disillusion by all three parties that have been in power over the years that they have done practically nothing to protect us. ( Although the Liberals did take the half-hearted measure of reducing some medical payments.) I was very glad to see Andrea Horwath and the NDP make this a major condition for their support of the minority Liberal Government.

The Liberals have promised to reduce Ontario car insurance premiums by 15%. Why only 15% when Quebec is more like 45% less? Personally I will be watching very closely to see if the Liberals do more than talk on this issue and it will be a major factor in deciding whom I support,

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Idea No. 172