It costs more to insure your car in Ontario – but WHY?

Dec
2011

You’ve had the experience: opening your vehicle insurance renewal policy, and groaning as you digest the cost to maintain coverage for another year – and on an asset of declining value.

But the value of the car itself is of less consequence in calculating the premium than you might think.

The Auditor General of Ontario released his 2011 report earlier this week, and made some interesting observations about car insurance in this province:

it costs more to insure a vehicle in Ontario than in any other province, largely due to this province having the highest healthcare and rehab costs for accident injury claims. (Ontario has about 7.5 million passenger cars and trucks.)

in the last 10 years the number of Ontarians injured or killed in traffic has decreased by about 25%. But, the average cost of an injury claim in Ontario resulting from a vehicle accident has risen to $56,000 – that’s 5 times higher than in the rest of the country!

drivers in the greater Toronto area (GTA) are paying the highest premiums anywhere in the country and account for 45% of the province’s injury claims.

the AG pointed out that although Ontario has one of the most comprehensive and highest benefit-paying auto insurance systems in the country, it “does not have significant measures in place to combat fraud”. An estimated 10%-15% of all premiums are paid back in fraudulent claims. The report recommends a more strategic approach at a provincial level, to stamp out insurance fraud.

But the report does hi-lite this positive: the auto insurance reforms introduced in September 2010 appear to be helping curb the rising costs of collision-related healthcare, and beginning to address injury rehab fraud.

the AG’s report on automobile insurance is here: http://www.auditor.on.ca/en/reports_en/en11/301en11.pdf

Tags: claims, cost, coverage, driving, fraud, insurance, premium