The Ontario Auto Insurance System Is “Fundamentally Broken”
By Patrick Rocca | October 16, 2015
An updated study of Ontario auto insurance, which was released on October 15, 2015, describes a system which is generating record profits for insurance companies, while overcharging drivers and failing to provide properly for accident victims.
Professors Fred Lazar and Eli Prisman of York University’s Schulich School of Business conducted the study, which was commissioned by the Ontario Trial Lawyers’ Association (OTLA). They report that Ontario consumers have overpaid approximately $1.5 billion for auto insurance in the past two years. That figure represents overpayments of $120 per each policy in 2013 ($840 million), and $100 per policy ($700 million) in 2014.
Responding to the report, Maria Bent, OTLA president, described Ontario’s auto insurance system as being in “deep trouble.” In a Canadian newswire story, she stated that ongoing reforms to the system “have clearly only benefited insurance companies.” OTLA has called for an independent review of the industry and has recommended that Ontario’s Auditor General should be assigned that task in order to examine premiums and insurance coverage, as well as industry profits.
Recently, the Ontario government appointed David Marshall as a special adviser on auto insurance. Ms. Bent said that OTLA welcomed the appointment and looked forward to working with Mr. Marshall in undertaking “real reform initiatives” that will result in reasonable premiums, provide accident victims with “appropriate and timely treatment,” and allow insurers reasonable profits.