Auto Insurance Rates in Ontario

Who is Responsible?

There is a lot of confusion amongst drivers in Ontario as to how auto insurance rates are determined.  Sometimes it may seem as though insurance providers randomly pluck numbers out of thin air; I myself have thought that when I receive my annual renewal notice.  The truth is auto insurance is strictly regulated by the Financial Services Commission of Ontario (FSCO).  Although each insurance provider has the flexibility to set their own rates based on a number of criteria, the Superintendent of Financial Services must review and approve any changes.

Five Key Facts about the FSCO:

  1. Makes sure auto insurance companies follow the law
  2. Helps consumers avoid being victimized by fraud
  3. Provides tips for drivers on how to find the best auto insurance rates
  4. Helps drivers resolve disputes with their insurers
  5. Helps keep rates reasonable


The Role of the Government

In August 2013, the provincial government announced its Auto Insurance Cost and Rate Reduction Strategy.  This is an on-going action meant to reduce rates by up to 15%, while ensuring that consumers remain protected.

Some of the changes that have already been implemented:

  • Offering a wider range of options on medical and rehabilitation benefits, attendant care, housekeeping and home maintenance expenses, caregiver benefits, tort compensation and compensation for property damage
  • Protecting consumers by strengthening the prohibition on the use of credit scoring, delays and other questionable screening techniques when providing quotes
  • Streamlining a number of processes to reduce transaction costs and ensure more accident benefit dollars go to treating accident victims


Auto Insurance Fraud

A major contributor to rising auto insurance rates is the prevalence of fraud.  In order to address this issue, the government announced the creation of an Auto Insurance Anti-Fraud Task Force in its 2011 Budget.  In November 2012 the group submitted their recommendations and in January 2013 the government took action.

In their commitment to the public they implemented the following modifications:

  • Requiring insurers to provide claimants with all reasons for denying a claim
  • Giving claimants a bi-monthly, detailed statement of benefits paid out on their behalf
  • Requiring claimants to confirm attendance at health clinics
  • Making providers subject to sanctions for overcharging insurers for goods and services
  • Banning providers from asking consumers to sign blank claims forms


Now What?

The government continues to stand by its promise to reduce auto insurance rates by tackling fraud, reducing costs, and implementing legislative changes.  I commend them for following through on this initiative, but I will only be able to confirm its effects when I see my own auto insurance policy renewal in the fall.


Farrah Rajan is a Paralegal student at Centennial College in Toronto studying professional communications with Omar Ha-Redeye.

New Tribunal? New Rules? Same Paralegals, Fighting the Good Fight

There could be new grounds upon which paralegals will battle upon in the Canadian legal system. With the Liberal party coming out of the last election with a majority government, it seems more likely than ever that recommendations in Justice Cunningham’s report will be followed and a new government administrative tribunal – addressing insurance disputes – will be formed.

Although accident benefits from personal injury cases are well within the scope of paralegals, the formation of this new tribunal will change the rules of the game with regards to accident benefits and the insurance dispute solution system (DRS).

Based on the “Automobile Insurance Transparency and Accountability Report” released on April 2014, the major parties in the recent Ontario provincial election all agreed that auto insurance was too high and that steps needed to be taken to this problem.

One of the main reviews and reports on the Ontario auto insurance DRS came from Justice Douglas Cunningham, in which he provided twenty-eight recommendations. The main recommendations are as follows:

  • Eliminate mandatory mediation in favour of settlement meetings with an arbitrator
  • Three arbitration streams: paper review, expedited in-person hearings & full in-person hearings
  • Penalties for not meeting specific timelines

There has been feedback from Cunningham’s report, particularly from the Financial Services Commission of Ontario (FSCO) arbitrators themselves. They believe that the dispute resolution process must be flexible, fair, have expertise and independence and outline the following issues with Cunningham’s report:

  • Decision-markers should be experts with full independence
  • Procedural rules should not be too rigid
  • Time lines must not be unrealistically short
  • Dispute resolution must be seen as a viable alternative to proceeding to court

Overall, these proposed changes provide a foundation upon which to build a new tribunal that will over see these accident benefits and would largely be participated by paralegals. With the clash of an old system and this potential new one, paralegals may have new, uncharted territory upon which to venture upon.


Jason E. Lau is a Paralegal student at Centennial College in Toronto studying professional communications with Omar Ha-Redeye.