Ontario drivers will have to pay more for auto insurance

With auto insurance rates set to jump in Ontario, a consumer advocate says drivers must be on their toes in shopping for policies.

Right now it’s ‘consumer beware,'” consumer advocate Lee Romanov told CTV Toronto on Tuesday.

What am I being charged for and how much? Do I realize that there are hundreds, even thousands of dollars difference between Ontario car insurance company rates for the exact same car insurance policy.”

Drivers could see their rates go up or down depending on the following:

  • the insurance company
  • the area you live in
  • your driving record

Shop around. You’ll get a better deal,” said motorist Ron MacLean. “And don’t be afraid to drop your insurance company and your insurance broker.”

MacLean’s own insurance went up $500 this year.

Insurance companies can adjust their rates four times per year. Toronto drivers can expect an average increase of about 14 per cent since mid-2008, with annualized nine per cent hike as a provincial average.

Some insurers have been given permission by the Financial Services Commission of Ontario to impose double-digit increases.

The industry said the cost of services such as assessments, rehabilitation and physiotherapy are rising rapidly, particularly in the GTA.

McGuinty’s spin
However, Premier Dalton McGuinty denied auto insurance costs are spiraling out of control.

Insurance (rates), on average, are lower than they were six years ago,” he told reporters at Queen’s Park — without saying his Liberal government took power in 2003. “Again, if you compare that with what happened to the cost of living, I think that’s a pretty good place to be in as a driver in the province of Ontario.”

McGuinty did admit that cost pressures were weighing on insurers.

The Insurance Bureau of Canada disputes that auto insurance rates are surging upwards even as it agreed with McGuinty on costs.

In September, the average Ontario driver was paying $1,362.11 a year on insurance, up 3.6 per cent from $1,314.26 at the same time in 2008, said Barbara Sulzenko-Laurie, the bureau’s vice-president of policy.

In November 2003, drivers were paying an average of $1,492.89 a year — 8.6 per cent more than they’re paying now, she said.

“(Drivers) shouldn’t expect a huge increase, but they have reason to be concerned,” Sulzenko-Laurie said.

Claims costs are heading up, and that’s going to result in rising premiums, she said.

We’ve had absolutely incredible increases in the cost of dealing with particularly injury claims and particularly minor injury claims,” Sulzenko-Laurie said. “Med rehab costs have risen dramatically.”

The opposition parties used the news of the rate hikes to call either for a system of public auto insurance or for legislation to lower insurance costs.

Finance Minister Dwight Duncan wouldn’t indicated if he’ll freeze rates.

Changes to auto insurance will be announced “very shortly” as part of the government’s five-year review of the sector, which he’d hoped to finish in June, he said.

We took a little more time to get it right,” Duncan said.

A controversial proposal to cap medical and rehabilitation costs of non-catastrophic injuries at $25,000, down form $100,000, is still on the table.

That has some in the rehabilitation industry saying that people could have the same premium bill but get less help if they are injured, although people with what’s called catastrophic injuries are eligible for up to $1 million in rehab help.