Ontario Auto Rates Show Decline

Rate applications approved during the first and second quarters of 2004 amount to an average drop of 7.3% in Ontario auto rates, according to the Financial Services Commission of Ontario (FSCO). This comes on top of the rate freeze in effect for most of the last quarter of 2003.

The rate freeze and mandated rollbacks followed successive quarters of high single-digit rate hikes, FSCO observes. The result is that auto rates at the end of the second quarter of 2004 came in just 0.98% higher than at the end of second quarter 2003. This compares with an almost 19% jump between second quarter 2002 and 2003, the provincial regulator notes. And, because new rates become effective at renewal, approved rate changes have not fully filtered through to actual rates at this time.

The Liberals recently came under fire in the media for not hiring extra staff to deal with the increased flow of rate submissions following the new auto insurance legislation. However, according to the FSCO release, rate submissions have been approved for insurers representing 97.8% marketshare for the first two quarters of this year.