(Photo credit: Ambah/SXC)
Owning a vehicle in Ontario can be pricey thanks to our sky-high auto insurance rates, which is five times more than other provinces, but vehicle owners will soon be given some relief. The provincial government aims to reduce rates by eight per cent by August 2014 and reduce it by 15 per cent in the next two years.
The plan was proposed by the NDP since in the past two years, auto insurance companies are paying less in accident benefits. Insurance companies paid $300 per vehicle in Ontario in 2012, which dropped from $764 in 2010, says the Financial Services Commission of Ontario. But the average premium hasn’t dropped for drivers.
According to Canadian Underwriter magazine, some of the steps the government plans to take to reduce the rates are:
- Providing the Superintendent of Financial Services with authority to require insurers to re-file rates
- Continuing to crack down on fraud, including licensing health clinics that invoice auto insurance companies
- Reducing unexpected costs by making the Superintendent’s Guidelines on accident benefits binding
- Exploring other cost reduction initiatives, including provincial oversight of the towing industry and addressing collision repair practices
- Continuing to require insurers to offer discounts for consumers with safe driving records
- Helping ensure that all regions of Ontario benefit fairly from cost savings.
Meanwhile, usage-based policies, which uses an electronic device to track driving habits, are launching in Ontario. It’s expected that these policies will drop car insurance rates for good drivers by an additional 15 per cent, which could mean a total of 30 per cent in reduced rates two years from now. Many countries have already embraced usage-based policies, which include the United States, United Kingdom and parts of Europe.
Car insurance rates could also become more affordable for teens since a Quebec program aimed at young adults between the ages of 16 to 24 is expected to available in Ontario next year.
If you own a car in the GTA, insurance costs you about $1,500 a year, according to the Insurance Bureau of Canada. Factors that affect your auto insurance rates include driving experience, driving record, vehicle use and location, vehicle type and the amount of coverage you choose.
While lower costs are beneficial to any household, it’s also important to consider how much coverage you would like. The Insurance Bureau of Canada details the minimum required auto insurance coverage in Ontario, but it may be beneficial to pay close attention to the accident benefits coverage your company offers.
In the unfortunate scenario where you require collecting vehicle accident benefits, the personal injury and accident lawyers at Neinstein Personal Injury Lawyers have been dealing with all accident related issues throughout Ontario for over 45 years. We know how to get you the compensation that you deserve and get your life back in order after being in a car accident. Call us at 416-920-4242, set up a free consultation, and come speak with us.
Greg Neinstein
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