Liberals use auto insurance to promote own agenda
Let’s face it, it’s tough — really tough — to drum up warm feelings for insurance companies.
In recent years, we’ve seen our rates soar and in 2010 benefits were capped.
The only thing that can raise even the slightest sympathy for the insurance business is when government meddles with their business.
Or, more specifically, when political parties use a private industry as a political football to promote their own agenda. If your heart doesn’t exactly go out to them, certainly you start to feel something akin to understanding.
What other industry has to suffer the slings and arrows of political fortunes — and politicians telling them how much to charge for their product?
On Wednesday, the Financial Services Commission of Ontario (FSCO) will announce rate decreases for companies that filed for rate approvals.
It’s expected there will be reductions of 3%-4% across the market. By August 2014 there’ll be a drop of 8%, with another 7% kicking in August 2015.
That rounds out to the 15% decrease over two years that New Democrats demanded as part of their deal to keep the Wynne government alive after the last budget.
So will the bill from your insurance company go down?
Perhaps. If you’re an average driver with a spotless record and nothing about you has changed over the past year, you just might get a break.
But if you live in an area at high risk of auto theft or staged accidents, you can kiss your 15% rollback goodbye. Likewise if you drive a lot or have a couple of teenage drivers on your insurance bill, you can forget any major reduction.
Drivers in the GTA are more likely to get dinged for the $1.6 billion it’s estimated insurance fraud costs us all. If your insurance bill is $1,500 outside the Toronto region, it will be $2,000 on average in the GTA.
Government regulates rates because the requirement to carry auto insurance is legislated by them.
New Democrat critic Jagmeet Singh came out ahead of Wednesday’s announcement to remind the government of the NDP’s 15% blackmail demand.
“It’s a private product but it’s publicly regulated. The government has a responsibility to make sure that the product in delivered in a fair manner, that the services are appropriate for what the people need and that it’s affordable,” Singh told reporters.
“Given the fact that the profits are so high, given the fact that the government cut benefits in 2010, the government has a responsibility to show that those cuts to our benefits result in some reduction,” he said.
A spokesman for Finance Minister Charles Sousa said the government is “looking forward to progress” with Wednesday’s announcement.
“We were clear all along that our strategy would reduce auto insurance rates by 15% on average over the next two years and would have an 8% reduction within the first year,” said Susie Heath.
“Our strategy to reduce rates continues to crack down on fraud, including licensing health-care clinics, exploring the provincial oversight of the towing industry, and addressing collision repair practices,” she said.
The government will continue to require insurers offer discounts to consumers with safe driving records, she said.
“We will take further action as required and all necessary steps to achieve the 15% average rate reduction target.”
In this case, “as required” means as long as this unelected premier and her minority government need the NDP to prop them up, they’ll keep scooping their lame-brained left-wing election platform.