The Cost of Auto Insurance is Going Up, Again

The cost of car insurance is going up, again, for many Ontario drivers. While governments have been promising that rates will be capped or go down for more than a decade, it appears they are going in the other direction, again.

Ontario already has some of the highest auto insurance premiums in the country and now they are set to go even higher. Some drivers will face increases of up to 11% on renewal of their policies. Most people will face a limited increase of 1.6% but some companies will have excessively higher rate increases.

These increases are coupled with reductions in many benefits, high deductibles on some accident benefits, and income replacement amounts that have not increase in almost two decades.

These changes have once again ignited debate between insurance companies and consumers in Ontario who have systematic cuts to benefits since 2010. Today about 70-80% of accident victims have access to only minimum benefits of $3,500 to cover treatment for injuries. This doesn’t go far in today’s economic climate, especially if you need more than a few treatments at the physio or chiropractor or both.

Most drivers in Ontario aren’t aware of the benefits that they are entitled to in an accident, nor are they aware of how little most of the benefits are. You can read about it in my Annual Auto Insurance Report. Here is a short summary with highlights. You can read the whole report here.

Lack of Knowledge About Auto Insurance Continues to Hurt Ontario Drivers

The Deutschmann Law Annual Survey on Ontario Auto Insurance reveals that Ontario drivers are becoming slightly more aware of optional coverage, but drivers continue to be insufficiently protected particularly when it comes to medical benefits and income replacement benefits.

The third annual survey from Deutschmann Law looked at optional coverage, the deductible for general damages and included questions regarding close calls, auto safety features and roundabouts.

The Deutschmann Law Survey reveals that 10 years after the introduction of optional benefit coverage, 30% of drivers are still unaware of the opportunity to purchase optional coverage. This has increased from 25% of drivers in 2017.

In 2010 accident victims had their medical and rehab benefits reduced from the basic coverage of $100,000.00 for everyone, to $3,500.00 for almost 80% of accident victims with the option to purchase additional coverage for medical and income benefits.

While people are aware of the availability of optional coverage, only 8% have purchased additional coverage. Of those, increased liability coverage was the most popular (71%) followed by increased medical coverage (50%) and then increased weekly income benefits (16%).

Though 75% of people were aware of a deductible that applies for property damage, only 52% were aware of a deductible for pain and suffering damages. The deductible is currently $38,818.97. However only 10% of those surveyed felt that the deductible is over $10,000.00. That means that where an injured party is awarded $50,000.00 for pain and suffering then the at fault insurer will only have to pay $11,181.03.

Only 25% of respondents feel there should be a deductible for pain and suffering damages.

The deductible for pain and suffering damages increases by the CPI rate annually, further eroding damages payable to innocent victims. Contrast that to rate payable by the insurer for income benefits (maximum $400.00 weekly) which has stayed stable since 1990, unless optional coverage is purchased.

“Our third annual survey shows that consumers in Ontario are not sufficiently informed about auto insurance including the availability of enhanced medical and income benefits and the erosion of damages when they are involved in an accident. There needs to be better education so consumers can make more informed decisions about their insurance and avoid becoming a victim twice – at the time of the accident and then realizing how their benefits do not sufficiently deal with their needs,” says Rob Deutschmann.

For those respondents that have been involved in a “close call” while driving, 87% identified that there was another vehicle involved and 11% with a bicycle or pedestrian. 45% identified speed as the biggest cause while 38% identified distracted driving and 25% identified improper turns.

The independent survey, conducted in September 2019, was administered by Metroline Research Group on behalf of Deutschmann Law. Over 800 Ontario licensed drivers between the age of 18 -74 participated. All were identified as decision-makers regarding their auto insurance policy.

For a full copy of the 2019 study and its findings, click here.

Deutschmann Personal Injury & Disability Law (Lawyers)

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