Are Car Insurance Companies in Ontario Ripping Us Off?
Feel like your car insurance company is ripping you off?
You’re not alone - it’s probably happening across the province, according to a new report released on May 1.
Car insurance companies in Ontario have overcharged Ontarians by $5 billion over the last five years.
Ontario’s auto insurers made $1.5 billion pre-tax income in 2016, up nearly 60 per cent over the last four years alone.
“This increase in profitability is likely the result of a widening gap between reductions in claims coverage costs and premiums,” said York University’s Schulich School of Business professor Dr. Fred Lazar. He conducted the study.
The average person in Ontario has been overpaying on car insurance by $143 every year, the report finds.
If you want to see numbers look no further than the premiums people were paying in 2011. That year claims declined by 27 per cent - premiums, on the other hand, barely declined.
The Ontario Trial Lawyers Association (OTLA), which commissioned the report, concludes that accident victims are not treated fairly, insurers enjoy excessive profits, premiums continue to increase, and auto insurance should become an election issue.
“This update is just another example of how Ontario’s auto insurance system is in need of a complete rethink,” said OTLA president Claire Wilkinson. “It underscores the extent to which our system is completely dysfunctional.”
Wilkinson had some more harsh words for the insurance system here in Ontario. She called it “a bad example to be avoided at all costs” and a “cautionary tale.”
OTLA is calling for a provincial auditor to report the profits of auto insurance companies to the public so they can make better choices about who they give their money to.
“By increasing transparency and reporting the government and consumers would have a better understanding of just how much profit is currently enjoyed by auto insurance companies in Ontario,” said OTLA president-elect Ron Bohm. “These are the first steps in restoring balance to ensure justice for accident victims and fairness for drivers.”
The OTLA is an organization of more than 1,500 law experts who aim to promote access to justice for all Ontarians, preserve and improve the justice system, and advocate for those who have suffered injury and losses.