For some time now, Ontario has struggled with having some of the highest auto insurance rates. Sitting just third behind Alberta and Nova Scotia, this may soon be in the past. The introduction of an insurance reform in 2024 can mean lower auto insurance prices for drivers across the country. This news comes as part of Building A Better Ontario, the province’s 2024 provincial budget. The government announced its plans to move forward with proposed auto insurance reforms for this year. This will make a lot of mandatory aspects of auto insurance coverage optional. Thus, providing drivers with a more modern system that will not only cater more to each driver but result in cheaper premiums. According to provincial budgets, this is the government’s second attempt in the last five years to lower these auto insurance reforms.
Auto insurance rates have been increasing
These auto insurance reforms come at a time when rates have been rapidly increasing for Ontarians. According to a report by RATESDOTCA, insurance premiums have risen roughly 12 percent from 2021 to 2023 (an increase of about $1,766.) This results in an average cost of $2,299 for Ontarians, according to a 2024 report by Hellosafe. The increase in auto insurance rates is an attempt to deter auto theft. From 2018 to 2022, Ontario experienced a 329% increase in auto theft claim costs. This was due to a 50% increase in auto thefts in the province. The province as a whole saw over $1 billion in auto theft claims.
What will these auto insurance reforms mean for Ontarians?
Since the new rules have yet to be cemented, insurers are still working out building policies around them. However, Finance Minister Peter Bethlenfalvy states that insurance reforms will provide more choice and flexibility for drivers. This will result in more affordable premiums. “We are also moving ahead with insurance reforms with more choice and flexibility for drivers to keep their premiums more affordable,” he tells CTV News. Bethlenfalvy notes that the reforms won’t necessarily lower auto insurance rates. However, they will likely provide drivers with more choices, which can result in lower premiums.
As of now, mandatory auto insurance will continue to apply to both “medical, rehabilitation, and attendant care benefits.” With that said, the additional options will provide financial relief for drivers by allowing them to opt out of coverage that they already receive through their work. “We have long advocated for much-needed reforms that provide consumers with more choice and options when purchasing auto insurance,” says the Insurance Bureau of Canada’s Vice-President for Ontario and Atlantic Canada, Amanda Dean.
Our very own CEO/Founder at isure, Dario Battista, mirrors this statement regarding the proposed auto insurance reforms. “It will add more complexity to what we do,” Battista tells Insurance Business Canada Magazine. “But it emphasizes the importance of what we do every day, [which is] to give advice to customers.”
Auto insurance reforms to reduce paperwork and red tape
According to the budget, the Ford government also has plans to help “reduce paperwork and red tape for patients and their health care providers.” The auto insurance reforms aim to make auto insurance companies pay for medical and rehabilitation benefits after an accident. This comes before extended healthcare plans cover any costs. This policy will apply to all vehicle accidents, regardless of what injuries are sustained.
“This is something we are committed to because we want insurance to be affordable for many,” Bethlenfalvy told reporters at a news conference on Tuesday. With auto insurance rates being such a hot topic in Ontario throughout the years, Bethlenfalvy says he hopes the changes will encourage “innovation and competition in the market, which could help prices.”
As of January 1st, 2024, Ontario allowed drivers to opt out of the once obligatory coverage known as Direct Compensation Property Damage, or DCPD. This coverage reimburses you, the driver, for damage to your vehicle when involved in an accident you are not at fault for.
NDP has concerns about reform risks
Ontario NDP leader Marit Stiles believes people will choose less insurance coverage for the wrong reasons.
“My concern and I think the concern of our caucus and our party is that this is going to force Ontarians who are looking for more affordable options frankly to take on additional risk that they shouldn’t be forced to take on,” Stiles told reporters at a news conference at the legislature Tuesday. “At the end of the day, it’s going to be Ontarians that will suffer.”
As an insurance customer, how will these new reforms affect me?
All of these new reforms mean that your insurance premium may be impacted. Once a date is set and we inch closer to it, your insurance provider will contact you about the new modifications, how they may affect your policy, and when the changes will be in effect. Contact us or request a quote today!
