The Ontario government pledged to lower car insurance rates charged to drivers by 15 percent below average premiums in August 2013. The province set a target of August 2015 to reach that goal, but admitted in a statement this week that they will fall short of their goal.
The Financial Services Commission of Ontario reviews any rate adjustments presented by the province’s largest insurers. The Canadian Press reported that companies representing more than half of the Ontario market filed rate hikes to the FSCO averaging 0.6 percent in the second quarter of 2015.
Ontario admitted that as of the end of April, average car insurance rates declined by approximately 7 percent below levels in August 2013. The FSCO says that with the rate hikes in the second quarter, average rates are down less than 6.5 percent below quoted premiums two years ago.
Car insurance became a political hot button issue in the province over the past few years. Opposition parties demanded the 15 percent rate cut in exchange for support of the provincial budget, which delayed the Ontario election by another year.
The IBC weighed in over the years by arguing that car insurance fraud, particularly around the Greater Toronto Area, is the primary reason that Ontarians pay significantly higher premiums than other Canadian motorists. IBC Ontario Vice President Ralph Palumbo spoke about the latest saga on rates, and reiterated that strategies to combat fraud will save drivers money over the long term.
“The regulator has looked at those rate filings and they've agreed that rates have to go up in many cases because the costs in the system are not coming down.”
The Ontario government was on the defensive following the announcement of the story, and encouraged drivers to keep supporting their long term approach to reducing rates. The opposition parties were on the attack, using the announcement to reiterate a long list of broken promises made at Queen’s Park.
Image Courtesy of Adobe Stock