Report finds that Ontario has one of Canada's least fair and effective auto insurance systems
There was little fanfare attached to last week's publication of Fair Benefits Fairly Delivered: A Review of the Auto Insurance System in Ontario. Which is odd, considering the sorts of revelations it brings to light.
Here's a passage taken from the executive summary of the report, which was put together by former Workplace Safety and Insurance Board CEO David Marshall: "Overall, Ontario has one of the lowest levels of auto accidents and fatalities in Canada and the most expensive auto insurance premiums. Historically, periods of cost reduction have inevitably been followed by cost increases. What is more disappointing is that while the number of automobile accidents in Ontario—especially very serious ones—have consistently come down, the cost of claims has consistently gone up. Ontario also has one of the least effective insurance systems in Canada. It is filled with disputed and inefficiencies and a very high percentage of premiums are being used to pay experts and lawyers and not going directly to injured persons."
It went on to show that the average Ontario auto insurance premium in 2015 was $1,458 per vehicle. When you exclude Ontario, that figure is almost 55 per cent higher than the Canadian average.
Auto insurance is mandatory in Ontario. While some provinces have government-run auto insurance agencies (Manitoba, Saskatchewan, BC) or some kind of government/private sector hybrid (Quebec), Ontario—like Alberta and Nova Scotia—has made its system fully reliant on private sector companies to carry out the brokering of auto insurance premiums. As Marshall points out, even though Ontario has built a private sector environment around auto insurance, the fact that it is mandatory puts an onus "on government to create a marketplace where fair benefits are fairly delivered, at a reasonable cost."
Marshall identifies the main flaw in Ontario's system as the way in which it encourages participants to work at cross-purposes, something he believes he could be remedied by setting up an arm's-length regulator. He advises against shifting to a government-run system at present because it would prove too disruptive.
Other recommendations Marshall makes include prohibiting most cash settlements, implementing mandatory programs to treat common injuries, and introducing independent, hospital-based examination centres that could provide single medical assessments.