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Ontario Budget Aims to Lower Auto Insurance Costs and Increase Consumer Choice [Video]

May 8, 2019

The government of Ontario released its provincial budget on April 11, 2019. Within this budget, the government detailed its multi-year plan to fix the auto insurance system in the province as part of the Putting Drivers First plan.

Among other things, the goal of this plan is to lower auto insurance costs, increase consumer choice and make the market more competitive. In its backgrounder, the government announced it would seek to accomplish this by:

  • Encouraging auto insurance companies to offer more discounts. In addition, the government hopes to enable insurance companies to provide new products, such as pay-as-you-go insurance. The plan will also allow drivers to use electronic proof of auto insurance, which could help drive innovation in the sector.
  • Combating fraud, which will ensure honest drivers do not have to pay for the dishonest actions of others. The government plans to work with the Financial Services Regulatory Authority of Ontario to reduce insurance fraud by enhancing data analytics, establishing new rules on deceptive practices and creating an online claims process to help detect fraudulent activity.
  • Improving the way auto insurance rates are regulated and reducing red tape overall.
  • Re-evaluating legal contingency fee arrangements to ensure consumers are protected and agreements are transparent. Annually, hundreds of millions of dollars in insurance benefits are diverted into contingency fees for lawyers—an issue the government is hoping to correct moving forward.
  • Introducing legislation that allows insurers to provide better coverage options based on a driver’s credit history. Ontario automobile insurance companies are currently prohibited from using credit information in their risk-classification system.

In addition, the government stated it would help those injured in auto accidents and ensure they get the care they need by:

  • Streamlining the claims process and improving access to medical care after a collision. This will be accomplished by introducing the Driver Care Plan.
  • Ensuring a driver’s insurance policy will pay for any treatments they need and gives them the option to receive cash settlements if they are eligible.
  • Bringing credibility and accountability to injury claim evaluations. The government noted they will reform the medical assessments process to accomplish this.

Experts hope these changes will give consumers more control when it comes to choosing coverage and the price they pay for auto insurance. To learn more about Ontario’s budget and the Putting Drivers First plan, click here.