Post Ontario Election: What is Next for Auto Insurance Rates
On the heels of the Ontario provincial election, which saw Doug Ford’s Progressive Conservative government defeat Kathleen Wynne’s Liberal government, many Ontarians are wondering what effect the new government will have on their Canada-high auto insurance premiums.
According to the Financial Services Commission of Ontario (FSCO), auto insurance rates are still trending in a non-favourable direction. In Q4 of 2017, car insurance rates increased an average of 1.03%. Q1 for 2018 fared worse, with an average increase of 2.23% during the first three months of 2018.
Premier Wynne’s Liberal Party promised a change to auto insurance rates for the better when voted into power in 2013. A large part of their campaign focused on a promise to lower car insurance rates by 15% within their first two years in office. Unfortunately, this did not happen and rates continued to increase, despite the Liberals best efforts.
About six months ago, the Progressive Conservative Party mentioned plans to ban postal code-based premiums. That said, auto insurance was not mentioned in the PC’s Plan for the People. Surely, a plan for auto insurance rates will be addressed in the near future by the PC government, especially with 2018 Q2 numbers on auto insurance rates coming in July.
Insurance Fraud Needs to be Curbed
Insurance Fraud is the largest contributor to Ontario’s Canada-high car insurance rates.
Aviva Canada estimates insurance fraud costs Ontarians $700 million - $1.6 billion per year. This translates to 10-15% of total annual car insurance premiums, roughly $100-$150 per insured, per year.
If the PC government can adequately address Ontario’s long-standing auto insurance fraud problems, that will go a long way to being able to stop auto insurance rates from increasing and, hopefully, even bring them down to a comparable average to the rest of Canada.