The Ontario government re-introduced its 2022 budget and, while there were no changes from an auto insurance perspective, creating choice for consumers will be among the industry’s main concerns, the Insurance Bureau of Canada (IBC) told Canadian Underwriter.
The budget document reaffirms the government’s commitment to creating more choice for consumers, cracking down on auto insurance fraud and ‘enhancing fairness,’ by creating new guidance on territorial rating. The budget re-introduction follows Premier Ford’s Aug. 9 Speech from the Throne.
“The most important components in this budget, from a consumer and industry perspective, is the focus on giving consumers greater choice over the coverages they purchase and placing a greater emphasis on cracking down on fraud,” IBC said in an email statement. “The industry is eager to work with [the] government on measures that will reduce costs and premiums for consumers.”
The budget outlines the Ontario government’s plan to create more choice by making it optional to purchase not‐at‐fault property damage coverage (also known as Direct Compensation – Property Damage). This will benefit those who, for example, “own older cars that are worth less than the cost to insure them,” said the document, which was unchanged from its April release. “The government remains committed to ensuring all drivers have as much choice as possible when it comes to auto insurance.”
To crack down on insurance fraud, the government has proposed to make amendments to the Insurance Act that would require insurers to provide fraud information to FSRA on an ongoing basis.
“IBC and its members are also pleased that the government has re-committed to introducing new measures to tackle fraud. We look forward to working with the government as it implements these important reforms to the auto insurance system,” IBC said in a press release.
The budget also mentioned the government is developing a new framework, in concert with FSRA, for ensuring fairness in rates that would replace outdated guidance, including existing guidance on territorial rating.
Premier Ford has previously expressed sentiments that postal code ratings were ‘unfair,’ although the proposed plan has yet to be released.
“We commend the Ontario government for its commitment to make driving more affordable for Ontarians. IBC and its members believe Ontarians deserve affordable auto insurance with more choice and better care. The measures re-committed to today in the budget will help bring about change for a better and more affordable auto insurance system,” IBC’s press release said.
“The re-introduction of the 2022 Ontario budget demonstrates that the government is willing to make significant changes to the auto insurance system to give consumers more choice, make products more affordable and create fairness for all drivers.”
Feature image by iStock.com/MicroStockHub
