Anyone want to save $100 per year on automobile insurance?
What’s the catch you ask?
Well, you will get less insurance protection than you need.
Oh, and did I mention your taxes will go up significantly because people without adequate insurance protection will now tap into the public purse?
In other words, paying less for automobile insurance gets you less in insurance coverage and results in increased government spending (also known as higher taxes).
Wouldn’t you expect the Ontario government to quantify and evaluate the impacts of a reduced mandatory automobile insurance product before making massive reductions to mandatory automobile insurance coverage?
Not so. The Ontario government, through its June, 2016 automobile insurance reductions, adopted this “cutting corners” philosophy as its ill-conceived solution to reducing automobile insurance premiums.
Now, the Ontario government has gone a step further by considering additional automobile insurance “cost cutting” measures recommended by their advisor, David Marshall.
The recommendations by Marshall will be up for public consultation later this month.
Surely, no one will be surprised when the Ontario government announces more changes and claims victory on this issue just in time to sweep this issue under the rug before the next election.
Let me be the first to congratulate the Ontario government for reducing automobile insurance premiums by increasing taxes.
What’s next? Reducing hydro bills by increasing taxes, or has that already happened, too?
Actually, there is one even easier way to immediately reduce auto insurance premiums — enforcing a restriction on insurers’ true profit to reasonable profit expectations.
(See the comprehensive study conducted by York University Schulich School of Business Professors Fred Lazar and Eli Prisman outlining excessive profits by insurers).
Unfortunately, the Ontario government appears completely unwilling to challenge insurers’ profit reporting despite compelling reasons to do so.
Injured motorists have significant care needs.
If those needs are not covered by insurers then the costs are absorbed in large part by various government-funded agencies.
No consideration has been given by the Ontario government to the financial and practical impacts of the June, 2016 automobile insurance changes, nor to Marshall’s recommendations, on government agencies paid for by the taxpaying public.
For example, one of the June, 2016 changes was a major reduction in non-earner benefits paid to injured persons such as students, who have suffered a “complete inability to carry on a normal life”.
Obviously, these accident victims have been severely disabled in order to qualify for that benefit.
But the June, 2016 changes limit non-earner benefits to less than a total of $20,000 when previously non-earner benefits for an injured student could have been worth roughly $500,000.
Now, the injured student, who is severely disabled and permanently unable to work, ends up on Ontario Disability, which ends up covering the same $500,000 in benefits over his or her lifetime.
Another June, 2016 change that was mean-spirited and unnecessary was halving the benefits available to the most seriously injured persons in car accidents, referred to as “catastrophically impaired” persons within the legislation.
With significantly less benefits available, the catastrophically impaired accident victim’s care, housing, transportation and treatment needs are all absorbed by the taxpaying public through government assistance such as CCAC, subsidized housing, Wheeltrans, ODSP and increased reliance on OHIP (leading to longer wait times at hospitals and reduced access to physicians).
The care needs of car accident victims are real.
The goal of the automobile insurance system should be to provide a product that gives accident victims a legitimate chance to maximize their recovery and to live with dignity and independence, without having to feel like a drain on the public purse.
Reducing automobile insurance premiums by ignoring the costs transferred onto the public system is a shell game, much like the shell game associated with insurer profitability.
Merkur is a partner at Thomson, Rogers in Toronto practicing plaintiff’s personal injury litigation, including plaintiff’s motor vehicle litigation. He has been certified as a specialist in civil litigation by the Law Society of Upper Canada and is the creator of the Ontario Personal Injury Damages Calculator. thomsonrogers.com/directory/darcy-merkur/