I agree to Idea Why Are Car Insurance Premiums So High?
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I disagree to Idea Why Are Car Insurance Premiums So High?


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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."


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,

Submitted by 1 year ago

Comments (12)

  1. Governments require us to have insurance and yet there seem to be few requirements by those insurance companies to honestly explain the ever increasing premiums. Insurance premiums are exorbitant in Ontario and an impediment to employment (employers and employees) and yet the government, who makes it mandatory for our citizens to carry it, put no impediment on the insurance companies to halt the spiraling premiums. Most voters are drivers and we're all watching for the party who will stand for all its citizens and not just the insurance companies.

    1 year ago
  2. btg

    public auto insurance... not for the damage or losses to cars, but for injuries - we end up picking up a lot of the costs through our health care system.

    1 year ago
    1. Moderator

      And this! The document discusses the way the government is trying to protect Ontario's from higher premiums.


      1 year ago
    2. I voted you down Tanya, re your links because that information is virtually useless. The 15% you indicate is a joke. This is over 2 years BEGINNING in August 2014. Either way; insurance companies will find a way to charge more to offset this difference. I got a ridiculous quote recently - and had to pay 3% ON TOP OF THE QUOTE - for the "convenience" of monthly payments - as if I could afford the $2400 up-front!

      1 year ago
  3. Ontario has the largest population therefore likely hood of more claims. Although I dont agree with how much insuraces charge. The 15% lowering premuims is not working insurance companies have already started charging as much as 20% higher to compansate for the lowering of this rate. Buttom line cooperations care only for their stake and shareholders.

    1 year ago
  4. tw

    The liberal government imposed the new minimum mandatory insurance coverage all Ontarians now enjoy. They did it because people we just getting the basic coverage and driving, when they were in an accident the province OHIP would pick up the tab. Not any more. The insurance company now picks up the tab. It doesn't matter if you are employer gives you health benefits or not, you are double covered with your vehicle insurance. In the past employees of DND for example, being covered 100% medical by Blue Cross through work, could opt out of extra hospital coverage through their vehicle insurance. Well times have changed, and with the minimum mandatory coverage premiums have grown in excess of 30%. Now they want to give me a 15% break. Thanks for nothing. When they legislated this in, they should have thought of the consequences, and made a limit to how much insurance companies can charge for the minimum coverage. My vote costs a lot more than 15% off my already inflated car insurance premium.

    1 year ago
  5. http://www.ibc.ca/en/Car_Insurance/ON/Minimum_Coverage.asp


    Car insurance in Quebec and Ontario are in no way similar animals. In Ontario, the insurance companies are on the hook for AB claims whereas in Quebec, AB claims are paid through their provincial health benefits. People will espouse the virtue of Public Auto Insurance as being cheaper than private insurance. Keep this in mind... BC currently has public auto insurance and they are currently under fire for large bonuses paid to bureaucrats even thought rates are increasing and service levels suck.

    I'm quite sure that if you limited liability to $50,000 in Ontario and removed the right to sue (as is the case in Quebec) that premiums would be markedly lower. But then again, people would complain because they can't afford the loss after an accident.

    Insurance companies in Ontario are overseen by FSCO (government office), who must approve rate changes for insurance companies.

    The real problem is that there are too many frausters and shucksters taking advantage of the system. The need to be caught and prosecuted.

    And related to that, our police need to stop charging every driver with careless driving after an accident. It used to be that unless you were actually carelessly operating your vehicle, that you were charged with a minor offense such as following too closely or failure to turn to avoid an accident. Now, at the incidence of an accident, the driver at fault is arbitrarily charge with Careless Driving by the police. This person then has the option to fight the ticket in court (which costs money to the person and the province), takes away needed court time for actual crimes, often gets police overtime pay for attending court, and results in the ever continuing backlog of court time in our system. The system is broken. Police are laying heavier charges knowing full well that individuals will fight it. Fix the system and actually charge people based on the crime.

    1 year ago
    1. As per paragraph 4 of your diatribe: "The real problem is that insurance companies DEMAND a profit - and a HUGE profit"

      1 year ago
  6. IF you want a license to sell ANY type of insurance in Ont them 20% of you portfolio WILL BE auto insurance or you are out of business. Watch the race to provide reasonable rates and coverage ,at the moment it's like shooting fish in a barrel (sucker fish)

    1 year ago
  7. A bold move would be for the province to take over car insurance business (for profit), but then be transparent about the reasons for insurance rates.

    1 year ago
  8. make insurance coverage coincide with the actual record of the insured.At this moment i pay insurance based on my nieghbourhood and the number of incidents.If an intersection has a number of incidents it reflects to the residents and raises rates of the actual accident participants not the rates of residents in the area

    1 year ago

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    1 year ago