Why don’t we have pay-per-mile auto insurance in Canada?

Why don’t we have pay-per-mile auto insurance in Canada?

The excerpted article was written by THE GLOBE AND MAIL

 I see ads on American TV for pay-per-mile insurance, where you just pay for how much you drive. The ads sound great; it really makes sense, especially now. Is that really how it works? Do any Canadian companies offer this? If not, why? – Rajinder, Ottawa

In Canada, we don’t have the option to buy insurance by the mile – or in our case, by the kilometre. The technology is already used here, but the rules in most provinces don’t allow it. “The regulations in the United States allow for companies to price per mile,” says Ryan Stein, executive director of auto-insurance policy and innovation at the Insurance Bureau of Canada (IBC). “In Canada, our regulators decided they want to take a more cautious approach.”

Pay-per-mile insurance uses a telematics device that’s attached to your car and sends information to the insurance company – including mileage, when you drive, speed and how hard you brake.

Pure pay-per-mile insurance, offered by two U.S. companies, charges you a base monthly rate and then, on top of that, charges you for the actual distance you drive.

“There’s a monthly base rate,” Stein says. “So if you’re paying $200 a month now, your base rate would be a fraction of that.” For instance, on the website for Metromile, a U.S. company that only offers pay-per-mile insurance, a fictional 40-year-old male driving a 2015 Honda Fit in Seattle would pay a base rate of US$53 a month. Then there would be charges of 6.7 US cents per mile up to 250 miles (402 km) per day. So, driving 50 miles (80 km) a month would raise the total bill to US$56. At 200 miles (322 km), it would be US$67.

TELEMATICS FOR DISCOUNTS ONLY

Since 2012, several Canadian insurance companies have offered telematics, but, in most provinces, they can only use them to give you a discount – not to set your rates. “You get priced as you always would, but you’ll get a discount if you drive safely,” Stein says.

Stein says provincial insurance regulators in Ontario, Alberta, Nova Scotia and Newfoundland should change the rules to allow pay-per-mile insurance. That means they can’t use telematics data to add to your bill.

“I don’t believe there are rules against it in Quebec or New Brunswick, but most of the insurance companies are national,” Stein says. “If it were allowed in more of the major markets, that could have implications for the rest of the country.” Pay-per-mile insurance “isn’t for everybody,” because higher-mileage drivers wouldn’t save anything – but it would make sense for people who don’t drive often, Stein says.

“Look at what happened during the pandemic – people went from commuting every day to barely driving,” Stein says. “If you had pay-per-mile insurance, your premium would just automatically be lower without you having to let your insurance company know.”

PAY AS YOU GO?

In Ontario, CAA Insurance has been offering MyPace, a pay-as-you-go plan, since 2018. It’s not exactly pay-per-mile, but it lets you pay a base rate, and then pay a fixed amount for every 1,000 kilometres you drive.

The company calculates your premium the same way it normally would – based on your car, driving record, age, gender, annual mileage and where you live – but breaks it into 1000-km segments. For instance, if you normally pay $1,100 per year, you would pay an annual base rate of $200 and then $100 for every 1,000 km, CAA says. You get notices as you get closer to the 1,000 km threshold. Once you’re over, you automatically buy the next 1,000 km. “If you only drive 5,000 km in a year, you’ll save 30 per cent,” says Matthew Turack, president of CAA Insurance. Turack recommends the plan for people who drive less than 9,000 km a year. If you drive more than than that, you will pay a surcharge – CAA says it’s about $8 or less – for every additional 1,000 km.

“This fee will put you above the price of our traditional auto insurance policy,” CAA’s website says.

Turack says rules aren’t the reason CAA Insurance chose pay-as-you-go instead of pay-per-mile. “We’ve never had any resistance from the regulator,” Turack says. “CAA Insurance didn’t go to billing for individual kilometres because of feedback we saw in the States, where consumers were surprised at their bills at the end of the month.”

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Toronto police say several officers suspended as tow truck probe continues

TORONTO _ The Toronto Police Service says it’s suspended several officers as it continues to investigate alleged corruption in the regional tow trucking industry.

Spokeswoman Meaghan Gray declined to say how many officers are involved but says they were placed on paid leave after undisclosed information surfaced in the course of the investigation.

That probe has already resulted in criminal charges against one officer, Const. Ronald Joseph, who is accused of stealing encrypted police radios that were used to help tow truck operators secure lucrative jobs.

Joseph is one of 11 people charged in the Toronto probe, while a similar investigation from the neighbouring York Regional Police has netted dozens of charges against at least 20 people.

Gray says the suspended officers are not currently facing any charges either under either the Criminal Code or Ontario’s Police Services Act.

The provincial government recently appointed a task force to draft a new regulatory framework for the towing industry, citing a recent wave of criminal activity as part of the need for tighter rules.

York police have alleged that a lucrative turf war has erupted along stretches of major provincial highways in and around Toronto, resulting in charges ranging from arson to murder. None of those charges have yet been proven in court.

The force alleged multiple tow truck companies, all with ties to organized crime, have defrauded insurance companies with vehicles involved in real and staged collisions.

Police further allege that the companies would grossly inflate towing and repair bills and move cars from lot to lot to increase storage fees.

Body shops and car rental companies were in on the suspected schemes, police said, and would receive profitable cuts for themselves.

Gray said Toronto police would announce if any of the suspended officers wind up facing charges.

COVID-19 isolation could mean more vehicles, more accidents but how?

COVID-19 isolation could mean more vehicles, more accidents but how?

The motor vehicle accident season has arrived
www.kitchenertoday.com

You wouldn’t think the COVID-19 pandemic would have much of an impact on motor vehicle accidents given the stay-an-home measures being suggested across the province. However, the combination of warmer weather and loosening restrictions may have the opposite affect according to a motor vehicle accident personal injury lawyer.

“There are currently less people on the road,” suggests personal injury and disability lawyer Robert Deutschmann. “But as things open up, I think the general thought is that fewer people might want to take transit because of physical distancing. That might mean more people cycling or driving motor vehicles which means more traffic.”

Warm weather and a desire to isolate while on the road is also a catalyst for motorcycle riders to roll out their machines. Predictably, accidents involving motorcycles are already on the rise, with five motorcyclists killed in Ontario over the Victoria Day weekend. Surprisingly, the founder of Deutschmann Law says that motorcycle riders are not usually the ones to blame.

“People have the perception of motorcycle riders to be reckless, but most of them aren’t,” said Deutschmann, who’s firm has been providing personal injury law services in the area for over 25 years. “Most are middle age or upper age people who just want to enjoy the road. The problem is, much like bike riders, motorcycle riders or pedestrians, people driving cars are sometimes inattentive. Stats show almost two-thirds of accidents involving motorcycles are caused by drivers not seeing the motorcycle.”

Overall, there were more than 53,000 collisions on OPP-patrolled roads in Ontario in 2019, with Fridays remaining the deadliest day on Ontario roads as people rush home or to get away for the weekend. As a result, the number of injuries caused by motor vehicle accidents continue to climb annually, and that’s often a problem for victims who assume bringing a claim for injury is a simple process.

“Anytime you’ve been in an accident, the general advice is to call a personal injury lawyer to find out what the rules are with respect to bringing claims for any injury as a result,” suggests Deutschmann. “The truth is, however, that it’s difficult to bring a claim for injuries from a motor vehicle accident in Ontario.”

Deutschmann says Ontario law concerning accidents states a claim for pain and suffering and future care needs can only be made if a victim suffers “permanent and serious impairment of a physical or psychological nature.”  However, that definition requires some explanation.

“The key is permanent and serious,” explains Deutschmann. “What does serious mean? Generally, serious means substantially affecting your ability to work or substantially affecting your activities of daily living. Then you can bring a claim for pain and suffering and future care needs.”

Bringing a claim for income loss is not subject to a threshold, but is still difficult. However, Deutschmann suggests that no matter how minor your accident-related injury may be, it’s important to seek some legal counsel.

“If you’ve been in an accident that’s not your fault and you’re having difficulties, maybe not able to work to the same level you could before, it’s a good idea to check with a personal injury lawyer just to review what your rights are with respect to that accident,” he said.

The personal injury lawyers at Deutschmann Law operate on a contingency fee basis, meaning there is no cost for a consultation or for legal services unless there is a settlement in your favour.

For more information, contact Deutschmann Law at 1-866-414-4874, serving Kitchener, Waterloo, Cambridge, Brantford, Elmira, Guelph, Woodstock and surrounding areas.

This Content is made possible by our Sponsor; it is not written by and does not necessarily reflect the views of the editorial staff.

Source: www.kitchenertoday.com

Customers urged to list drivers on their insurance policy

Customers urged to list drivers on their insurance policy

In September, ICBC introduced a new insurance rating model to create a fairer system that better aligns the price of insurance with a driver’s level of risk.

As part of the change, customers are required to list all the regular drivers of their vehicle, including all household members and employees (regardless of the number of days they drive) and any other individuals who will drive the vehicle 12 or more days in a calendar year.

Customers are required to do this when purchasing insurance so that their premium accurately reflects the combined risk of all drivers, and that all customers are paying their fair share for insurance.

In the event a person who regularly drives the vehicle but isn’t listed on the policy causes a crash, the customer can face an additional one-time financial charge, called the Unlisted Driver Accident Premium (UDAP). This financial charge was put in place in order to reduce fraud in the system and better ensure customers don’t choose intentionally to avoid listing higher-risk drivers on their policy.

The amount of the UDAP varies – it’s calculated by looking at how much the customer’s premiums would have been, had the driver who caused the crash been listed as required. The difference is multiplied by 15 for both Basic and Optional insurance, up to a maximum of $5,000 for Basic and to a maximum of two times the total Optional premium.

Since the introduction of the changes, approximately 444 customers are facing this additional charge due to crashes caused by an unlisted driver. The average additional charge amount is about $2,971. All funds collected from UDAP go directly to lowering premiums for all other drivers.

However, recognizing that this new model is an adjustment for British Columbians, ICBC is waiving the Optional portion of this charge for crashes that happen before September 1, 2020.

To illustrate the impact of the changes, the following is an actual customer example:

  • Description: Married couple, in their 50’s, living together in Metro Vancouver. One person has no crashes, and the other has caused three at-fault crashes in 2018. The one who has caused three previous crashes isn’t listed on the policy but drives the car anyway and causes a crash this year.

  • What they paid for their insurance: $2,800/year

  • What they should have paid if both people were listed properly: $3,900/year, a difference of $1,100/year.

  • Unlisted Driver Accident Premium (UDAP):

    • Total: $8,140

    • Optional portion waived by ICBC: $3,140

    • Adjusted total: $5,000

For more information on listing drivers on your insurance policy, about Unlisted Driver Protection, and applicable requirements and exceptions, visit https://www.icbc.com/insurance/costs/drivers-experience-crash-history/Pages/default.aspx.

SGI sees record-setting year for driving safety

The news was all good for SGI when they tabled their annual report in the provincial Legislature on Thursday.

Not only are things rosy from a financial perspective, the provincial auto insurance plan reported the lowest number of fatalities ever record in Saskatchewan.

The province has officially exceeded the five-year target of a 30 per cent reduction in injuries and fatalities on roads in Saskatchewan a full year ahead of schedule, with the original plan to see that level of improvement by 2020-21.

Compared to the baseline set in 2015, injuries dropped nearly half — 45 per cent — to a total of 3,850 while fatalities were down 56 per cent to 71. The number of deaths is the lowest ever recorded in Saskatchewan since data tracking started in 1951.

“In 2019, there were historic lows in the number of deaths and injuries on Saskatchewan roads, and the number of people killed as a result of impaired driving deaths was 61 per cent lower than the average over the previous decade,” Minister Responsible for SGI Joe Hargrave said. “While the people of Saskatchewan deserve much of the credit, SGI’s work alongside partners in government, law enforcement, and community organizations has made a significant contribution toward changing driving habits and improving safety on our roads.”

The Saskatchewan Auto Fund — the mandatory vehicle insurance program administered by SGI — also had a solid year.

Some of the highlights include:

  • $889.3 million in claims;
  • $962.7 million in gross premium written;
  • $151.5 million in discounts to customers through the Safe Driver Recognition (SDR) and Business Recognition programs;
  • $29.3 million net storm claims.

SGI Canada — which sells property and casualty insurance throughout western Canada — reached a target of $1 billion in direct premiums written, exceeding the plan to reach that level by next year.

“This Saskatchewan-based company has a significant presence throughout the country and is maintaining that profitable growth within a market of tough competitors,” Hargrave said.

Highlights for SGI Canada include.

  • $49.9 million net income, with a return on equity of 11.4 per cent pre-tax;
  • $54.3 million dividend to government;
  • $22.7 million in investment earnings;
  • $1 billion in direct premiums written, including $418.9 million (42 per cent) written outside Saskatchewan, achieving SGI Canada’s goal of 40 per cent one year ahead of target;
  • $32.5 million in storm claims (all provinces).

SGI Canada now has 970,000 customers across the country.

For more information, visit www.sgi.sk.ca.

Road tests to expand July 8 with phased approach

Road tests to expand July 8 with phased approach

ICBC is continuing to expand its road testing by opening it up to all customers through a phased approach. This builds upon the successful reopening of commercial vehicle road tests in June, in line with B.C.’s Restart Plan.

ICBC’s road test plan helps British Columbians get the services they need while ensuring important health and safety protocols can be implemented, monitored and maintained as testing increases.

Timeline

The following plan is contingent on the state of the pandemic in the province and may be adjusted based on the need to ensure the ongoing health and safety of both customers and staff. Specifically, the ongoing availability of appropriate personal protective equipment (PPE) is a key factor that ICBC is monitoring at this time.

  • Motorcycle road tests: available as of July 8; customers may book online.

  • Recreational Trailer (Class 4 and 5 endorsement) road tests: available as of July 8; customers may call ICBC (1-800-950-1498) to book an appointment.

  • Priority testing for essential health care workers and first responders who require a licence for work; workers may call ICBC today (1-800-950-1498) to book. Information will be requested to establish eligibility.

  • Private Passenger Vehicle (Class 5 and 7) road tests:

    • Priority testing for customers with tests cancelled between March 17 and March 30; ICBC will start calling customers this week to rebook; road tests to begin July 20.

    • Following this first grouping, ICBC will then be prioritizing the re-booking of customers who had road tests cancelled after March 30. It is expected that these customers will be able to re-book through the month of August.

    • More details on the timing for new road test bookings will be provided in the following weeks.

  • Enhanced Road Assessments: ICBC will call to rebook customers whose assessments were cancelled between March 17 and March 30. All other customers requiring a medical fitness assessment will receive a letter from RoadSafetyBC.

  • Commercial road tests (Class 1 – 4), motorcycle skills tests, and knowledge tests are available for booking.

  • Other services: ICBC’s offices have remained open during the pandemic while also offering customers the option to renew a 90-day temporary driver’s licence by phone. To manage the demand and volume of customers in an office at any given time, ICBC is also looking to move to an appointment system for in-office visits, including driver licence renewals. More information will be provided when plans are finalized.

What to Expect

  • Making an appointment: Due to the expected high volume of calls, we ask for customers’ patience during this time. Customers whose appointment was cancelled between March 17 and March 30 will not need to call – ICBC will call affected customers. For all other customers, they are strongly encouraged to book online if the option is available for their test type.

  • Before the appointment: Customers are asked to review the vehicle safety checklist and ensure that the interior of their vehicle is clean.

  • Upon arrival: Customers are asked to arrive on-time with the required identification. They will be asked a series of health screening questions and provided a mask that must be worn for the duration of the road test.

    Due to the nature of the motorcycle road test, riders will not be provided a mask, but will be required to wear a safety vest provided by ICBC, which will be sanitized before each use.

  • Testing: Driver examiners will continue to conduct road tests from inside the customer’s vehicle to ensure the examiner is able to fully assess the customer’s driving skills and to take control of the vehicle in the event of an emergency. Driver examiners will wear appropriate PPE during the test.

    For motorcycle road tests, the testing environment remains unchanged. The examiner rides behind the rider in a car, speaking to the rider by two-way radio.

For more information on ICBC’s services during the pandemic, visit: https://www.icbc.com/about-icbc/contact-us/Pages/covid-19.aspx

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