Insurance companies in Canada earned profits of $4.4. billion in 2012 – up 24% from 2011. Not a bad return in what are supposed to be economic slow times. I know I haven’t had a 24% increase in my income from last year. I am not against a company earning profits, indeed, I want insurance companies in Canada to be profitable. In my mind being profitable means that a company is providing a needed or wanted product to the market in an efficient and cost effective manner. However, insurance and particularly auto insurance is a different animal. Insurance companies make money by not paying out claims of its customers, while raising premiums. With respect to auto insurance, everyone in Ontario who drives is required by law to buy insurance so there is a ready market for the insurers to tap. The most galling issue though is not that auto insurance is mandatory, or that the government allows the auto insurers to charge premiums to guarantee a 12% profit on auto insurance; no what irks me the most is that auto insurers in Ontario continue to cry poor to the government resulting in benefits being cut to auto accident victims. In September 2010, the mandatory auto insurance benefits in Ontario were cut by more than 50% while premiums continue to increase. It is time that everyone speaks out against rising insurance costs and decreasing benefits. As a starting point, all insurance companies in Ontario should be open and transparent with how much they collect in premiums and how much they pay out to their customers in benefits. When all the information is on the table all stakeholders, which includes everyone who drives in Ontario, can have an open discussion on how to reform auto insurance so that it is fair and just to every Ontario citizen.
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