The state of Ontario’s auto insurance, with high premiums despite a low number of accidents, was lambasted by the province’s Ministry of Finance last week – and now one brokerage has suggested that a solution may be to raise the deductible limit for suing insurance companies or third parties.
The president of DMW Insurance, David Waserman also said he wanted to see cash settlements with insurance companies go through claimants instead of lawyers first, as well as a cap on lawyers’ fees.
“If someone sues an insurance company or a third party, there’s a deductible limit. If you bump that deductible limit to a dramatically higher number like 10-fold of what it is now, I think you might see bodily injury claims reduce dramatically,” Waserman said.
Ontarians paid an average premium of $1,458 per vehicle in 2015 compared with the Canadian national average of $930, according to the provincial government’s Fair Benefits Fairly Delivered: A Review of the Auto Insurance System in Ontario report. The study contrasted the fact that residents of Canada’s most populous province paid the highest premiums in the country despite have one of lowest accident and injury rates.
“Ontario also has one of the least effective insurance systems in Canada,” the report said. “It is filled with disputes and inefficiencies, and a very high percentage of premiums are being used to pay experts and lawyers and not going directly to injured persons.”
Waserman argued insurance companies just play within the rules they’re given by the province and aren’t the ones to blame for Ontario’s woes.
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“In most cases it’s the same insurance company in Ontario as it is in Alberta,” he said. “The product itself may be different, with some people saying the benefits in Ontario are more generous than other provinces like Alberta. But is the extra legal assistance necessary to handle the claimant’s disputes in Ontario compared with another province?
“For example, Intact insurance operates in Quebec, Ontario and Alberta. Is Intact insurance so much harsher in Ontario that their customers need that legal representation compared to another province? I don’t think so.”
Claimants are already getting the care they deserve from the initial claim, said Waserman, adding that lawsuits don’t accomplish much for either side.
“What benefits are there in the acts and benefits portion itself that people are really suing for? Are they not provided with compensation and sufficient benefits through the basic acts and benefits program right now?” Waserman asked.
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