Ontario has approved stiff increases in auto insurance rates prior to changes aimed at cutting the cost of minor injury claims. The most startling and puzzling increase –  27.3 per cent for money-losing TD General Insurance Co. – would come into effect Sept. 1, the same day standard accident benefit coverage is slated to be reduced.

The cumulative effect of all increased approved for TD in a 12 month period stands at 54 per cent. This was far beyond any other insurer, although TD General lost $1.2 million in 2009. Insurers representing most of the industry had increases averaging 5.37 per cent approved during the first quarter of 2010, the Financial Services Commission of Ontario announced late Thursday. The increase came on top of the 5.59 per cent approved in 2008 and 8.77 per cent in 2009, and brought the 12-month average to 12.3 per cent.

Leonard Sharman, a spokesman for COSECO Insurance CO., said the firm’s cumulative increase of 20 per cent in the past year was due to its heavy concentration of business in the Greater Toronto Area. This is where accident benefit costs have been increasing well beyond other areas of the province,” he said. “Hopefully… (when) reforms come into place (we will) start to see some cost decreases, although that is still a bit of a question mark.”

The average cost of minor injury claims in the GTA was nearly four times higher than in Ottawa during 2008.

Officials at TD General were not available for comment. Observers suspect the insurer of about 2 per cent of Ontario drivers won approval for the extraordinary increase on the understanding it would submit a new application.

Insurers had until Thursday to file rate applications based on new regulations declared March 2.

Other insurers owned by Toronto Dominion Bank and cleared raise rate Sept. 1 were Sovereign General Insurance Co., 11.2 per cent(on average); Primmum Insurance Co., 10.8 per cent, and TD Home and Auto Insurance Co., 13.3 per cent. Ontario auto policies will only pay $3,500 for treatment and assessment of minor injuries starting Sept. 1.  No one judged to have a minor injury – mild whiplash neck pain, for example – will be able to claim child care and other benefits.