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Mackay Insurance Blog

 

July 2019

Auto Insurance In Ontario Is Changing: What You Need to Know

auto insurance policy

Since early January of this year, Ontario’s leadership has been putting the entire auto insurance industry under a magnifying glass, beginning with a survey sent to current policyholders.

Its goal? To initiate reforms to lower premiums to a level in line with the relatively low volume of reported auto-related accidents and fatalities.

To that end, officials have been surveying customers to discover exactly what is – to use their precise words – “broken” in the auto insurance industry. 

In this timely blog post, find out breaking news about these auto insurance changes that may impact what you pay, your coverage levels and your access to electronic resources for managing your auto insurance policy.

What Policyholders Had to Say About Navigating Auto Insurance

The January Ministry of Finance policyholder survey results didn’t surprise anyone who has ever had to navigate the increasingly complex and expensive world of Ontario auto insurance.

More than half of the respondents reported that they found the fine print on their own auto insurance policy too complicated to easily understand. A full 55 percent of respondents said there were few options to customize their auto insurance to their individual needs.

Even as the survey results were being tallied, a Newswire editorial simultaneously reported on continued auto policy rate hikes across Canada.

Some of the steepest hikes took place in Ontario, where policyholders saw increases of up to 9.06 percent. The report cited insurance fraud and increased claims as a reason for the hikes.

The New Proposed Plan: Putting Drivers First

In early April, the government unveiled the new auto insurance plan, entitled "Putting Drivers First."

Lots of proposed changes will be coming down the pike, each of which is designed to help Ontario drivers get lower rates and individually tailored coverage.

Here are five changes we feel are particularly relevant and compelling – be sure to discuss these changes and how they may impact your auto insurance policy!

Reducing Industry Regulation

With fewer auto industry regulations imposed from the provincial level down, insurers will be free to customize rate plans and policy benefits to a greater degree.

This will benefit policy holders by creating more healthy competition among insurers to create new tailored auto insurance plans and packages that appeal to different customer segments.

No More Postal Code Discrimination

Ontario officials have indicated their plans to stop rate increases that are based solely on the policyholder’s address.

Increasing Options to Trim Policy Costs

A number of options are on the table to potentially reduce the costs of issuing and administering auto insurance policies.

Among the most anticipated are two that many feel are long overdue in the industry.

  1. Drivers will now be permitted to permit insurers to review credit scores and credit history to influence policy rates.

  2. During the claims process, drivers will now be given options to use certain repair facilities or healthcare clinics and receive reduced policy rates.

Fraud Prevention Is a Priority

Ongoing issues with widespread auto industry insurance fraud has impeded the industry’s efforts to better serve customers.

Ontario officials plan to implement stricter controls to improve industry-wide customer data security, control escalating auto insurance claims-related legal expenses, institute new rulings on unfair practices in the industry, develop an online process for submitting and tracking claims and more.

Better E-Insurance Options

January customer survey respondents highlighted a lack of electronic options as a chronic source of frustration when managing their auto insurance policy information. 

Officials have announced that customers will now be able to make policy payments online, access coverage details and documents, connect with their brokers, use e-POF (proof of insurance) documents as needed and communicate via email about auto insurance matters.

Streamlined Claims Processing

The current ponderous claims process has contributed to issues with auto insurance and medical fraud and has caused rising costs. 

Under the new Driver Care Plan, benefit limits for catastrophic injury claims will be increased from $1 million to $2 million in benefits.

After filing an accident/injury claim, proposed changes include providing the insured with a type of insurance debit card that has been pre-loaded with funds that can be used toward covered medical expenses such as physical therapy. 

What to Expect Over the Coming Months

With new rate hikes coming on the heels of the announcement of Ontario’s long-awaited auto insurance industry overhaul, it is hard to know exactly what we can expect in the coming months.

What we do know is that the proposed auto industry-wide reforms are designed to take place in a gradual rollout over the next few years to soften the impact to Ontario’s budget. 

Officials cite the need to design, test and implement the proposed reforms, which have the potential to impact an estimated 10 million Ontarian policyholders, as another reason for the multi-year rollout.

Rest assured that we will keep all of our policyholders updated on important industry reforms that may affect their insurance rates and coverage, claims processes and policy benefits.

Do You Have Questions About Auto Insurance Policy Changes in Ontario?

If you have questions about options to lower your auto insurance policy rates, available discounts and credits, bundling options and family auto insurance plans, we invite you to give your broker a call or send us an email. 

Remember to update your information if you have moved, added a new vehicle, changed your driving habits significantly or taken a seasonal vehicle out of storage for summer use. 

Get in Touch

Are you shopping around for a new auto insurance policy? We can help!

Contact us online or give us a call at 888-853-5552.

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