Auto Insurance

How big of an issue is auto insurance going to be in the Ontario election?

By: Jessica Mach on February 13, 2018

The Ontario general election is slated to take place in June, and as the Liberal party aims for another majority, its track record over the past term — or more specifically, how closely its promises matched its actions — is under scrutiny.

Among the issues is the party’s stance on auto insurance. Ontario’s premiums continue to rank as the most expensive in Canada, despite the province’s relatively low level of accidents and auto-related deaths and injuries. All this could make auto insurance a point of contention among voters.

In 2013, the Liberal party ran — and won — on a platform that included a pledge to cut auto insurance rates by 15% before 2015. By the end of 2017, however, the rate had only been lowered by 5.5%, according to the Ontario Ministry of Finance.

The Liberal party tried to deliver their promise by reducing the mandatory coverage required for first-party accident benefits, and changing the definition of catastrophic impairment in Ontario’s standard accident benefits schedule. But these efforts were not enough to make a substantial dent in the average driver’s insurance premiums.

Why? In a 2017 report, David Marshall, a special advisor to the Finance Minister of Ontario, wrote that rising legal costs might be to blame. The rising cost of car parts also factor into higher costs.

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And costs are continuing to rise. After a small dip in the fall, premiums were slated to rise again last month when Ontario’s financial regulator, the Financial Services Commission of Ontario (FSCO), approved premium hikes for 17 Ontario insurers.

On Monday, Canadian Underwriter reported that Darren Godfrey, senior vice president of personal lines for Intact Insurance, said that the company expected “a further 5% [increase] in rate in 2018.”

Charles Brindamour, Intact’s CEO, insisted that such hikes would not have much of a political impact — at least not yet. “When it comes to elections, I think automobile insurance is not at the top of list of things that Ontarians are concerned about,” he said.

Brindamour is right that auto insurance is likely not the most prominent issue that Ontario residents are considering as they cast their ballots. But it’s not irrelevant, either.

As the cost of living in Toronto — the country’s most populous city — creeps ever higher, the amount of money that drivers pay for their auto insurance premiums can definitely make a deep impact on their quality of life.

And if the feedback we get from users of our website is any indication, many Ontarians do care about how much they’re paying for their auto insurance. And they immediately voice their displeasure that the provincial government hasn’t done more to lower it when they hear premiums are going up.

Hopefully the government and insurers are paying attention.