Ontarians Pay Too Much For Auto Insurance, And Here’s Why

Ontarians Pay Too Much For Auto Insurance, And Here’s Why

Fraud must be rooted out and the costs to settle claims must come down

Kim Donaldson The Ontario vice-president of the Insurance Bureau of Canada.

Ontario’s 9.7 million drivers pay too much for auto insurance.

Bet you didn’t think you’d hear that from Ontario’s auto insurers. But it’s true: drivers in this province pay far more than drivers in every other province. In 2016, Ontario drivers paid on average $1,437, which is 19 per cent more for auto insurance than drivers in Alberta, and 65 per cent more than drivers in Atlantic Canada.

If you ask insurers why premiums are so high, they’ll give you two reasons — fraud sucks resources out of the system and claims settlement costs are too high.

Ontario drivers give different reasons for high premium costs. But most often, their reasons are based more on myth than reality. Here are some reasons I’ve heard from Ontarians, along with facts to set the record straight.

Myth: Ontario’s highways are more congested and have more new drivers, resulting in more accidents.

Reality: Ontario’s roads are among the safest in North America. According to a recent government report, Ontario’s 2013 auto-accident fatality rate was the second-lowest ever recorded in the province and the second-lowest in all of North America, behind only the District of Columbia. And Ontario’s auto-accident injury rate in 2013 was the lowest ever recorded in the province and among the lowest in Canada.

Myth: We get better insurance benefits in Ontario.

Reality: This is partly true. Ontario’s auto insurance system does provide some of the most generous benefits in Canada. However, claimants do not receive the full value of those benefits. In fact, according to a recent report by the province’s auto advisor, David Marshall, claimants received only $2.5 billion of $3.87 billion paid out in claims in 2013. The rest, approximately $1.4 billion, went mainly to health practitioners and lawyers. Marshall states that the amount of “leakage” threatens the very foundation of the auto insurance system.

Myth: Insurance companies are gouging consumers.

Reality: The Ontario auto insurance market is not a high-margin business. In fact, insurers regularly lose money on Ontario auto insurance as is indicated by the loss ratio numbers the industry releases annually. In 2016 as an example, the overall combined loss ratio for personal passenger vehicles in Ontario was 102 per cent. Put simply, for every dollar insurers collect in auto premiums, they pay out $1.02 in claims and operating costs.

Fraud must be rooted out and the costs to settle claims must come down.

The fact is that, in other provinces, insurers can charge much lower premiums and still make an acceptable return on their auto insurance business.

So what needs to change in Ontario?

Fraud must be rooted out and the costs to settle claims must come down.

First, let’s look at fraud. Fraudsters come in many forms — from organized crime rings that stage collisions to disreputable health practitioners who over-charge for treatments. Whatever the form, the end result is higher claims costs. According to KPMG, auto insurance fraud costs Ontario consumers $1.3 billion a year.

Research shows that when governments take up the cause, they get good results. In 2014-15, the California Department of Insurance’s Fraud Division, which acts as the primary law enforcement agency responsible for investigating automobile insurance fraud, made 354 arrests, and referred 376 submissions to prosecuting authorities.

We need that same government focus here in Ontario.

Second, how can we reduce the costs of settling claims?

According to David Marshall, claims for simple minor sprains and strains often take more than a year to make their way through the system. And these types of minor injuries account for 80 per cent of all auto insurance claims. Marshall also found that about one-third of the cost of benefits for claims for minor sprains and strains is paid out in lawyers’ fees and to experts providing competing opinions, among other costs. This money never reaches the injured parties.

Marshall makes several strong recommendations for fixing this problem, including the creation of a new regulator charged with streamlining the system. We agree with Marshall’s suggestions and my industry is keen to work with the provincial government to make it happen.

It’s time to get serious about reducing the costs of fraud and of settling claims that are driving up Ontario’s auto premiums.

Source: Huffington Post

Dash Cams May Help You Keep Your Auto Insurance Rates Low

By Andrew Lo – Chief Marketing Officer for Kanetix.ca

Car dash cams have captured some jaw-dropping footage on Canadian roads: near misses, collisions, road rage and examples of bad driving, to name just a few. There is no shortage of videos. But for drivers with a dash cam in their car, it’s often more than just another gadget to film your drive and catch other drivers behaving poorly. It’s viewed as an added security feature that leads many people to wonder: does having a dash cam in your car help lower your auto insurance rates?

Are there auto insurance discounts if your car is equipped with a dash cam?

Currently, there is no auto insurance discount in Canada for having a dash cam installed in your car. Nevertheless, that hasn’t stopped many Canadian drivers from getting them. According to a recent Kanetix.ca survey, one in 10 drivers (nine per cent) already drive a car equipped with a dashboard camera and more than one-quarter (26 per cent) said that while they don’t currently have a dash cam in their car, they think it’s a good idea.

It’s also an idea that isn’t cost prohibitive. Dash cams typically range in price from about $100 to as much as $500, but for many drivers, they’re well worth the investment.

Reasonable doubt: The benefits of dash cams

Although there is no car insurance discounts for dash cams in Canada, the good news is that a dash cam may be able to help you keep your car insurance rates low. The footage could go a long way in the insurance claims process should it prove you were not at fault for a collision that you would otherwise be found to have caused. Many collisions come down to one person’s word against another’s and with dash cam footage, it’s easier to identify — and prove — what truly took place.

Additionally, a dash cam can also provide reliable details about the circumstances of a crash. Were there passengers in the car? Where were they seated? Those are details that, during a stressful time, may be easy to overlook or forgotten after the fact. Dash cams can also come in handy if the other driver decides to flee, as there’s a good chance the licence plate number and description of the vehicle would be caught on tape.

“Many collisions come down to one person’s word against another’s and with dash cam footage, it’s easier to identify — and prove — what truly took place.”

Finally, dash cams can record more than just your drive into the office, it can also keep an eye on your car when it’s parked. There are dash cams available that have a parking mode that records when the vehicle is not in use, giving you footage if someone vandalizes your car or tries to steal it.

Dash cams and distracted driving

If you have a dash cam, or plan to get one, it’s important to set it and forget it. Install the dash cam in a location that does not obstruct your line of sight while driving and keep your eyes and hands off it too. They last thing you want to do is run the risk of getting a ticket for distracted driving, which in Ontario, comes with a hefty fine of at least $490. Besides, the whole point of having a dash cam is to provide added security and protection in the event of a collision, not cause one.

The future of dash cams

With 35 per cent of Canadian drivers either already having a dash cam in their car, or thinking it’s a good idea, the popularity of dash cams cannot be denied. And if one day it’s proven that a dash cam can lessen the likelihood of insurance scams, deter theft and improve road safety, perhaps then one day they’ll be standard in new vehicles, just like rear backup cameras. Only time will tell.

Source: Huffington Post

Wildfire situation in British Columbia and surrounding area: IBC is here to help – Safety remains first priority

July 8, 2017 (VANCOUVER) – As British Columbia has declared a state of emergency due to wildfires burning out of control throughout much of the Interior, Insurance Bureau of Canada (IBC) is reaching out with information and advice for those affected.

“Our thoughts are with those whose lives have been disrupted and whose homes have been destroyed. The priority right now is the safety of those affected and their loved ones,” said Aaron Sutherland, Vice-President, Pacific, IBC. “The insurance industry is here to help. Anyone with questions about their home or business insurance can call their insurance representative or IBC’s Consumer Information Centre at 1‑844‑2ask‑IBC.”

What insurance covers

Most home and business insurance policies cover fire damage. If residents have to leave their homes because of a mandatory evacuation order issued by civil authorities, most homeowner’s and tenant’s insurance policies will provide coverage for reasonable additional living expenses for a specified period of time. Your insurance representative is at the ready to clarify the details of your policy.

The claims process

If you have been affected by a wildfire, when safe to do so, take the following steps:

  • Assess and document the damage. Taking photos can be helpful.
  • Call your insurance representative and/or company.
  • List all damaged or destroyed items.
  • If possible, assemble proofs of purchase, photos, receipts and warranties. Take photos of the damage and keep damaged items unless they pose a health hazard.
  • Keep all of the receipts related to cleanup, and if you’ve been ordered to leave your home, keep the receipts for your living expenses.
  • Ask your insurance representative what living expenses you’re entitled to be reimbursed for and for what period of time.

Next steps

  • Once you have reported a loss, you will be assigned a claims adjuster. It may take some time, given the number of people affected by the wildfires, but you will be contacted.
  • The claims adjuster will investigate the circumstances of your loss, examine the documents you provide and explain the process. Take notes during the conversations and don’t be afraid to ask questions.
  • Your insurance company will ask you to complete a Proof of Loss form, to list the property and/or items that have been damaged or destroyed, with the corresponding value or cost of the damage or loss. You must sign and swear that the statements you make in the Proof of Loss form are true. Ask your insurance representative or claims adjuster to clarify anything you are unsure about.

Resources

Anyone with questions should contact their insurance representative or IBC’s Consumer Information Centre at 1-844-2ask-IBC.

For additional information, consumers can also visit www.ibc.ca  or email askibcwest@ibc.ca.

IBC congratulates federal government, Ontario and the City of Toronto, for commitment to flood mitigation

Insurance Bureau of Canada (IBC) congratulates the Government of Canada, the Government of Ontario, and the City of Toronto for their commitment to flood mitigation as part of an over $1.1 billion funding announcement for Waterfront Toronto.

“Recent flood events in Ontario, Quebec and British Columbia have demonstrated the effect that these disasters can have on communities,” said Craig Stewart, Vice-President, Federal Affairs, IBC. “As a society, we cannot continue to put Canadians into harm’s way.  The Toronto Port Lands development will transform an industrial site into an attractive residential community.  Recognizing that this is a floodplain, the federal government, the Government of Ontario and the City of Toronto are investing the needed funds to ensure this new community is inoculated against flood risk.”

The governments of Canada, Ontario, and Toronto announced a commitment of $1.185 billion for Waterfront Toronto. A portion of this will be devoted to protecting the area around the Toronto Port Lands from flooding including diverting the Don River to a naturalized river mouth. As more development in the area is anticipated, investments in flood mitigation will help make this community safer for residents and stronger for economic growth.

“The era of reckless floodplain development must now end”, added Stewart. “IBC is working with the federal and provincial governments, and other organizations focused on flood-related issues, to advocate for a national strategy to address flood risk. Insurance itself is not sufficient; federal and provincial governments can coordinate on a ‘whole of society’ approach to reduce risk for consumers.”

Additional resources:

About Insurance Bureau of Canada
Insurance Bureau of Canada (IBC) is the national industry association representing Canada’s private home, auto and business insurers. Its member companies make up 90% of the property and casualty (P&C) insurance market in Canada. For more than 50 years, IBC has worked with governments across the country to help make affordable home, auto and business insurance available for all Canadians. IBC supports the vision of consumers and governments trusting, valuing and supporting the private P&C insurance industry. It champions key issues and helps educate consumers on how best to protect their homes, cars, businesses and properties.

P&C insurance touches the lives of nearly every Canadian and plays a critical role in keeping businesses safe and the Canadian economy strong. It employs more than 120,000 Canadians, pays $9 billion in taxes and has a total premium base of $49 billion.

For media releases and more information, visit IBC’s Media Centre at www.ibc.ca. Follow IBC on Twitter @InsuranceBureau or like us on Facebook. If you have a question about home, auto or business insurance, contact IBC’s Consumer Information Centre at 1-844-2ask-IBC.

SOURCE Insurance Bureau of Canada

Hamilton-Niagara RCMP Make Arrest in Synthetic Identity Fraud

The Hamilton-Niagara Regional Detachment of the Royal Canadian Mounted Police (RCMP) – Financial Crime Section have arrested and charged 48 year old Naeem AKHTAR from Markham, Ontario with Fraud and Money Laundering. The value of the fraud is presently estimated at this time to exceed $3 million dollars.

The scheme involved over one hundred false identities used to obtain credit cards and other loans from Canadian financial institutions. Known as a make-up, pump-up, run-up scheme, the suspect created an elaborate network of false identities and shell companies. The fake identities used included false Ontario driver’s licenses or actual Province of Ontario driver’s licenses created using fake foreign passports, fake Social Insurance Cards or false Canadian Permanent Resident cards.  This differed from traditional identity theft in that the personas created did not exist at all, which poses a threat to the Government of Canada’s systems and programs as well the integrity of Canada’s financial institutions.

Credit was created using the fake identities with falsified employment records and paystubs from the shell companies controlled by AKHTAR. The credit was increased by patiently accepting credit increases over the years. The shell companies were used to launder the proceeds of the crime by creating false invoicing for the fraudulent credit cards.

The scheme was further complicated by the use of postal mail forwarding services.  Through this AKHTAR was able to provide dozens of seemingly unrelated and innocuous addresses on credit applications but the mail would actually be redirected to rental mailboxes controlled by him.    AKHTAR is scheduled to appear in court on August 15th, 2017 in Newmarket, Ontario.

This investigation was assisted by proactive work from the anti-money laundering and corporate security units at Canadian Tire Bank, Canadian Imperial Bank of Commerce, The Bank of Montreal, TD Bank, Royal Bank, Scotiabank, and the Ontario Ministry of Transportation. The RCMP would also like to thank the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) for its collaboration in this investigation.

“The creation and use of synthetic identities by criminals to enrich themselves is a threat to all Canadians and poses a significant risk to Canadian government programs and financial institutions. This investigation is an example of the effective partnership between the RCMP, FINTRAC and Canadian Financial Institutions. The RCMP is committed to working together with our partners to combat this type of fraudulent activity by criminals who only seek to enrich themselves at the expense of Canadians” said Inspector Todd Gilmore, Southwest District Commander.

The investigation is ongoing.

Website: RCMP in Ontario
Twitter: @RCMPONT
Facebook: RCMP.Ontario
YouTube: RCMPGRCPOLICE

SOURCE Royal Canadian Mounted Police

$75,000 Non-Pecuniary Assessment for Aggravation of Chronic, Disabling Pre-Existing Condition

Reasons for judgement were published today by the BC Supreme Court, Vancouver Registry, assessing damages for a collision which aggravated long-standing pre-existing health complications.

In today’s case (Cheema v. Khan) the Plaintiff was disabled since 2003 due to arthritis and depression.  She was involved in a 2012 collision that the Defendants admitted fault for.  The collision aggravated her pre-existing issues.  In assessing non-pecuniary damages at $75,000 Chief Justice Hinkson provided the following reasons:

[103]     There is no question that Ms. Cheema was unemployable after 2003. She had been on long-term disability from employment as a linen worker since 2004 due to rheumatoid arthritis and major depressive disorder. She was diagnosed with rheumatoid arthritis in the 1990s. The pain was in her neck initially, followed by bilateral hand pain since 2000. Her rheumatoid arthritis affected her hands, wrists, feet, ankles and shoulders. In the month preceding the Collision, the plaintiff had a flare up of her rheumatoid arthritis. Since 2000, the plaintiff had also suffered from longstanding, severe and chronic major depressive disorder, chronic anxiety and panic attacks leading up to the Collision.

[104]     I am unable to accept the plaintiff’s submission that her condition prior to the Collision was stable. She suffered from severe rheumatoid arthritis, Morton’s neuromas and a severe major depressive disorder prior to the Collision, and these conditions compromised her ability to ambulate, cook, clean and perform other household activities. I am satisfied that the plaintiff’s severe rheumatoid arthritis and severe depression waxed and waned prior to the Collision, but overall were worsening, and would have continued to worsen even if she had not been involved in the Collision.

[105]     I find, however, that the Collision caused an aggravation of her pre-Collision neck, back and shoulder pain and headaches, and likely had a negative effect on the symptoms arising from her rheumatoid arthritis.

[106]     I conclude that the plaintiff’s neck, back and shoulder pain and headaches were worsened by the Collision and that without the accident she would not have suffered from those difficulties as much as she has for the four years that have followed the Collision.

[107]     I accept the evidence of Dr. Shuckett that stress has a negative effect on someone suffering from rheumatoid arthritis, and has had such an effect on the plaintiff and accelerated the progress of her disease.

[108]     I am also persuaded that the Collision had a negative effect on the plaintiff’s psychiatric state that has resulted in a downward spiralling effect causing the plaintiff to brood about her physical condition and limit her activities, in turn worsening her depression, in turn compromising her participation in certain activities and so on…

[133]     I assess the plaintiff’s non-pecuniary damages at $75,000.

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