Great news for responsible drivers: after being shelved during the June Ontario provincial election, the Liberals have given new life to a plan to slash auto insurance premiums by an average of 15 per cent.
The Auto Insurance Cost and Rate Reduction Strategy mandates the discount must be implemented by providers as of August 2015. The Liberals announced the revivement of the bill Tuesday, expressing confidence that it would be in place by the proposed deadline, despite only a third of price cuts (an average of 5.44 per cent) rolled out since the bill was announced last September. As well, they have admitted a previous deadline to implement an average 8 per cent cut by this August will not be achieved.
It is estimated that a 15 per cent reduction in premiums would save the average driver $225.
A Great Time to Shop Around
About a dozen companies have already slashed rates by 10 per cent or more since the bill was introduced, and Ontario Finance Minister Charles Souza is confident more will follow as the mandated deadline approaches and competition ramps up among the industry.
Sousa points out that these recent developments put consumers in a prime money-saving position – and the onus is on them to shop around. “It’s up to consumers to choose the best possible rate that they can get,” he said in an interview to CP24, adding, “There are some companies that have already priced themselves below market and now they’re trying to figure out how to best compete.”
A New Focus on Combating Fraud
In addition to their renewed focus on rate reduction, the Liberals are also combining a separate bill targeting the $2-billion-per-year insurance fraud problem, viewed as a main contributor to Ontario’s sky-high rate pricing. These measures will crack down on phony medical practitioners and crooked tow truck services that work in tandem to generate huge insurance payout kickbacks; now, only licensed service providers will receive payment from insurers, with steep consequences for agents who abuse the system.
The measures will also limit the length of time vehicles can be stored by garages post-accident, will require tow truck drivers to register their vehicles, provide transparent billing and acquire customer permission before charging for a tow.