How the Greater Toronto Area affects Ontario auto premiums

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Rivalries run deep in Ontario and there’s no dividing force quite like the capital city itself. Mere mention of Toronto can bring a range of reactions, from the pride of a city-dweller to the subtle self-conscious contempt of an Ottawa resident.

But did Greater Toronto Area drivers have a hand in the creation of the provincial auto insurance reforms? Barb Sulzenko-Laurie, IBC’s Vice President of Policy said that much research has been done to compare data from the GTA to data from outside the area. She told ILSTV about the differences.

Barb Sulzenko-Laurie: We started back in 2004 and then again in 2006, trying to compare what’s happened to costs in the GTA versus non-GTA and how much of these problems that we’re identifying are, in fact, a GTA problem. I have examples, like the following:

Accident benefits – the average cost of an accident benefits claim in 2005 in the GTA was $30,162. In the non-GTA, it was $30,088. That’s in 2005. By 2009, in the GTA it had gone up to $60,581 and in the non-GTA to $45,899. In other words, from 2005 to 2009 in the GTA, the average claim cost for no-fault accident benefits claim went up 100 percent. In the non-GTA it went up 52.5 percent.

I think that’s a very, very important point. Let me just look at total coverage. This is for all coverage, including collision, property damage, direct compensation, comprehensive and so on. Total coverage: in the GTA from 2005 to 2009, average claims cost went up 57.7 percent and in the non-GTA, they went up 16.1 percent.  And if you just look at the last two years, total average claims cost went up 18 percent in the GTA and 7.2 percent in the non-GTA.

Barb said it’s not the total losses that end up costing the industry.

Barb Sulzenko-Laurie: It’s coming from fender-benders that produce whiplash and shoulder strain that end up being extended, extended medical care episodes and then go on and become chronic pain and PTSD and psychological issues and so on.

What these overall statistics really are illustrating is that a large, large number of minor injuries that end up using more resources than perhaps they need trumps a smaller number of very serious injuries in terms of the overall cost to the system.