Millions of Ontario drivers are about to be slammed with double-digit premium hikes. In the Greater Toronto Area, for example, the average driver is likely to pay nearly 14 per cent more. Ten insurers serving more than a quarter of Ontario drivers have just been cleared to raise their rates a second or third time in about 12 months. Their policyholders will be hit with increases averaging between 11 and 19 per cent when the policies come up for renewal — joining drivers insured by several other companies that had already been cleared for double-digit increases.
Another seven companies have been cleared for smaller increases in the latest round of approvals. Calculations show GTA-area policyholders of the 17 companies face an average increase of 14 per cent, while in the province as a whole drivers will see increase of 9.1 per cent.
But some GTA-area drivers — depending on the company they are with, their driving record and the neighbourhood they live in — face increases of 30 per cent or more. “The big cost driver in Ontario … is accident benefits costs,” said Leonard Sharman of Co-operators General Insurance Co.
“Things like assessments, medical rehabilitation, physiotherapy costs, etc. have been increasing pretty dramatically, and this is most pronounced in the GTA.” His company has been allowed two modest increases totalling 8.57 per cent since the middle of last year.
But its GTA increases would be 11 and 14 per cent, said Sharman, warning there is more to come in March. Don Forgeron, president of the Insurance Bureau of Canada, said: “Insurers are doing all that they have at their disposal (in the face of rising demands for treatment and compensation): pass those cost increases on to consumers.
“I guess we, like everybody else, are waiting with anticipation for an announcement by government. “We think we have made a credible case for substantive reform, and we hope we have been heard.”
Insurers complain the only means they have to stand up to what they see as excess requests for assessment and treatment — mainly minor sprain, strain and whiplash injuries — is to order their own costly assessments. While Finance Minister Dwight Duncan is expected to announce changes to auto insurance policies within days or weeks, it won’t be this week. A spokesperson says his fall update of the budget Thursday is his first priority.
The Financial Services Commission of Ontario said in its latest quarterly announcement it had cleared insurers serving a third of Ontario to raise rates an average of 6.2 per cent. But that was just the latest rate change for the 17 insurers. When compounded with increases approved over 12 months, the increase will be 9.1 per cent as annual policies are renewed. Insurers serving about 27 per cent of drivers have been granted double-digit province-wide increases.
These include AXA Insurance at 12.2 per cent, Kingsway General Insurance Co. (recently renamed Jevco Insurance) at 21.2 per cent, and State Farm Mutual Automobile Insurance Co., at 12.5 per cent.