Insurance rates are as high as they’ve been since 2016, and the government is stepping in
Insurer Aviva Canada has implemented new — and what some call drastic — auto policy changes that some motorists are not happy about.
Calgarian Scott Ramsay is one of those drivers. He’d been a policy holder for almost 10 years.
“I had no tickets, no convictions, same with my wife,” Ramsay said. “We’re clean drivers and we always have been.”
They did have one insurance claim for hail, three years ago, but Ramsay said that was it.
That’s why they were surprised to get a letter and lengthy renewal application from Aviva Canada a few weeks before their policy was to be renewed.
“Just the way it was worded, it kind of ticked me off. You can apply for renewal and we may give you the opportunity to renew.”
The letter further stated if he was approved, the full premium was due at renewal — he could no longer pay in installments.
“There will be many people who can’t afford to pay that — 12 months upfront,” Ramsay said. “So they will walk away.”
Global News has heard from several Aviva Canada customers who have experienced the same situation.
Some didn’t read the letter carefully, or respond in time, and their insurance coverage was cancelled.
Aviva Canada spokesperson Fabrice de Dongo told Global News:
“Fundamentally, we’re just working to make sure we have accurate and updated information, so that we have a full understanding of our customers’ needs.”
He said Aviva does this because during the year, drivers can get into accidents or get tickets and the company can’t accurately rate or assess the risk, or determine the proper premium for a renewal.
“In some instances, we may also amend payment options for a customer.”
de Dongo said the company will also give customers as much time as possible to update their information, and they will always renew properly completed applications.
In Alberta, he said Aviva mails out renewal applications 45 days prior to the renewal date.
Aviva Canada went on to say the changes won’t affect all of its policy holders and it also isn’t limited to Alberta customers — but for competitive reasons, the company can’t disclose any more details.
Ramsay doesn’t know why he was chosen, but said he believes the insurer is trying to sign on new customers at higher premiums in order to make more money.
Global News put the allegation to Aviva, but didn’t get a specific response.
“I’m essentially giving them $2,500 a year to insure two cars that I don’t claim on,” he said. “Now they just lost that business.”
Ramsay has moved on, choosing to shop around. He said he’s signed on with a new insurer and will be saving $400 a year.
It’s getting more expensive to drive for some Canadians.
A report from LowestRates.ca, an online comparison site for insurance, mortgages, loans and credit cards, found that drivers in Ontario, Alberta and Atlantic Canada saw auto insurance prices go up in the first quarter of 2019.
The steepest increase happened in Alberta, where auto insurance prices increased by 11.22 per cent in the first quarter of 2019 when compared to the same time a year earlier. According to LowestRates.ca, insurance companies are blaming the price hikes on a government-imposed cap that limits the amount that auto insurance rates can go up.
“Several of our auto insurance partners we have spoken to in the province say they have been limiting the number of new clients they’re taking in Alberta because the caps are hurting them financially,” the report said.
“Naturally, this scenario has led to fewer options for consumers when they go to sign up for auto insurance.”
In Ontario, auto insurance prices increased 9.06 per cent in the first quarter when compared to the same time in 2018, while Atlantic Canada saw a slightly more marginal increase of 6.52 per cent.
The jump comes as the Ontario government looks to fix what it calls the “broken” auto insurance system, with a multi-year plan introduced in the 2019 budget earlier this month.
Premier Doug Ford’s Progressive Conservative government unveiled a blueprint to to change Ontario’s auto insurance system. The strategy will focus on lowering costs, finding efficiencies, reducing regulations, increasing competition, and fighting fraud, the government said.
“Regardless, it will take some time to see all of these changes go into effect – during which time prices in the province could move even higher,” the report said.
When it comes to Atlantic Canada, LowestRates.ca said prices in Newfoundland and Labrador have driven the increase.
Jody Winder was walking back from an errand in Milton, Ont., on a mild fall day in 2017, when she discovered a hole in the panoramic sunroof of her brand-new BMW X5. She had just picked up the vehicle from a Toronto dealership less than two weeks earlier.
Part of the sunroof had shattered while the car was parked in a residential driveway in an area clear of objects, trees or other vehicles, she said. There was no trace of anything that could have hit the glass inside the car, she added. And there does not appear to be an audible impact preceding the shattering in a dash cam video Winder provided to Global News.
Winder was flabbergasted and upset — but that was just the beginning of her ordeal, according to her account.
When she called BMW Assist, the car maker’s exclusive emergency service for drivers, she said she was told her vehicle was “driveable.” She would have to take it to the dealership herself for repair the next day.
“I had to drive home on towels because [the glass] was everywhere,” Winder told Global News via telephone.
She didn’t make it back before the rest of the sunroof “exploded,” chipping the paint on the roof, she added.
“It was terrifying,” she added.
So when Winder heard from her Toronto BMW dealership that repairs would not be covered by warranty, she took the matter to BMW Canada itself.
In a letter threatening legal action viewed by Global News, Winder demanded a new replacement vehicle or a complete refund of her $90,000 car purchase. Eventually, BMW agreed to cover the cost of replacing the roof, cleaning up the interior and repairing the roof under “goodwill,” according to Winder.
The whole process took until mid-February as new issues kept popping up, Winder said. When she first picked up her repaired car, for example, she noticed her seatbelt wouldn’t lock because the buckle was still full of glass.
Still, in the end, Winder said she got her luxury SUV back in tip-top shape without paying a penny. And she told Global News she’s happy with how BMW dealt with her case.
BMW Group Canada has not responded to several requests for comment about Winder’s account of the events.
For all her alleged troubles, Winder’s consumer experience could have been worse.
Global News has received several reports from drivers indicating that dealerships and manufacturers blamed the accident on something hitting the roof and dismissed the possibility of manufacturing defects.
Data from Transport Canada shows complaints about shattering overhead glass have grown from zero in 2007 to over 100 in 2016, a number that’s likely growing along with the popularity of ever-larger sunroofs.
Drivers are often left to their own devices, with dealers and manufacturers refusing to pay for damages, usually worth around $1,200, even when the vehicles are under warranty, according to accounts collected by Global News.
Sunroofs usually shatter because of accidental damage, Transport Canada previously told Global News. Even something as small as a pebble can cause tempered glass to explode into tiny pieces, especially if the sunroof has already been subjected to significant stress.
In a smaller number of cases, however, manufacturing defects also play a role. Impurities in the glass, for example, can put additional stress on a sunroof when the crystal expands at higher temperatures. In cases involving issues around the quality of the glass, even leaving your car parked in direct sunlight during the hot season may increase the chance of the sunroof shattering, Chris Davies, head of research and development at Belron, the world’s leading vehicle glass repair company, told Global News in a previous interview.
The trouble, though, is it can be “very difficult” to tell whether a sunroof shattering was caused by external impact or whether a manufacturing issue also played a role, Davies said.
Consumers are then left with three choices: file an insurance claim, turn to small claims court, or pursue arbitration through the Canadian Motor Vehicle Arbitration Plan (CAMVAP).
Insurance claims: you may avoid a deductible but will your costs go up?
Mark Barsoum chose to file an insurance claim with Aviva Canada after he was told replacing the shattered sunroof of his 2017 Hyundai Tuscon would not be covered under warranty.
In a pleasant surprise, Barsoum told Global News he did not have to pay a deductible.
That may happen when the claim is paid out under the comprehensive section of the auto insurance policy, according to Anne Marie Thomas of InsuranceHotline.com, an insurance comparisons site. Comprehensive insurance is optional coverage for damage to a vehicle that doesn’t stem from an accident.
Still, some drivers may still be required to pay a deductible for glass repair, even if they have comprehensive coverage, according to ThinkInsure.ca.
And too many comprehensive claims could result in policyholders’ insurance costs going up, Thomas said.
Speaking to Global News about Barsoum’s case, Hyundai Canada said its vehicles are safe.
“Nothing is more important to Hyundai than the safety and security of our customers. Hyundai stands behind the quality of our products and this is demonstrated through our long-standing and industry-leading five-year warranty that has benefited many Canadian consumers and continues to be a significant statement of confidence in the quality and safety of our vehicles,” the company said in a written statement.
Toronto Sun | Postmedia News
The good news is Premier Doug Ford promised major reforms to Ontario’s broken auto insurance system in last week’s budget.
The bad news is previous governments — including the Liberal one he defeated in June — have attempted such reforms and failed.
Ontario drivers are among the safest in Canada but pay 55% more for auto insurance than the Canadian average, according to a 2017 study — by insurance expert David Marshall — done for the previous government.
As Finance Minister Vic Fedeli said in his budget speech: “It is clear that Ontario’s auto insurance system is broken — and drivers deserve … transformative changes.
Insurers blame the problems mainly on fraud, which Marshall estimated costs them $1.3 billion annually.
But even more money — $1.4 billion, a third of all insurance premium benefits — goes to duelling lawyers and medical experts in court, instead of to treatment for accident victims.
Because of Ontario’s “no fault” auto insurance system, victims often have to sue their own insurance company for benefits.
As the Fair Association of Victims for Accident Insurance Reform (FAIR) notes, this means they have to hire their own lawyers and medical experts to counter their insurance companies’ lawyers and medical experts, eating up billions of dollars that should be spent on treatment.
Auto insurers complain plaintiffs’ lawyers drive up costs by charging outrageous contingency fees, redirecting money for treatment into lawyers’ pockets.
The root problem is our adversarial court system is ill-equipped to deal with these issues.
Ontario needs a system in which credible, independent, objective medical and insurance experts, approved by the province and accepted by both sides at the start of major claims, determine the injuries sustained, appropriate treatment, and costs.
We agree with the Ford government’s decision to restore the maximum benefit for those catastrophically injured in car crashes to $2 million, and it’s intent to increase competition and consumer choice in the auto industry.
That is, with the caveat that allowing insurers to offer customers cheaper insurance packages providing them with less, and often inadequate coverage, while making them pay more if they want to keep their current coverage, is not genuine reform.
Ford’s government seems to be aware of the major problems. Fixing them won’t be easy, but it needs to be done.
This must have been Following Too Closely Week in British Columbia. I received the story of an incident in Sooke, an analysis of a video from Richmond and was subjected to this dangerous behaviour myself. You might be able to get away with ignoring the Motor Vehicle Act, but the laws of physics will eventually prevail.
The story out of Sooke goes like this:
I’ve just witnessed the most inconsistent driver I’ve EVER SEEN in my 38 years of driving!
A black car passed me on the 4 lanes towards Sooke. He gets behind a pickup and commences to follow between 20 to 5 feet, maybe even LESS a couple times, all the way to Sooke. I was waiting for them to crash he was so close!!!
When the pickup turned off he’s right on the bumper of the next driver.
Now here’s the crazy part: He signals properly going through the traffic circle and signals to go into Village foods.
So he KNOWS how to drive properly yet tailgates like the most ignorant driver on the road…
Last Wednesday afternoon I was traveling in the right hand lane northbound on the south side of the Malahat. I had just entered the 70 km/h zone on the south side when I heard a loud air horn sound behind me. A glance in my rear view mirror showed nothing for a few moments but the shiny chrome grille of a green dump truck pulling a pup trailer.
Apparently he did not want to slow down or change lanes.
The drivers in these two stories knew they were wrong.
The one in Sooke made a deliberate choice to ignore common sense. Hopefully he has not fallen into the trap of letting this become his default setting because nothing bad has happened from it, yet.
In my case it was either the driver not wanting to slow on the hill or he had a momentary lapse of attention and was warning me of an impending collision because of it.
The video in the Richmond article shows typical following distances on B.C.’s highways today.
ICBC no longer publishes detailed collision data by contributing factor as it did years ago. However, a document from 2007 shows following distance at #7 in the list of top 10 causes of collisions.
This behaviour not make the top 10 in traffic tickets issued during 2017 though. Police wrote about 2,000 tickets for following too closely in general and 48 for commercial vehicle following too closely specifically. This is about 0.5% of the total number of tickets issued that year.
Please, not so close! Leave at least 2 seconds distance between vehicles. The risk may be comfortable for you but it’s not the smart choice.