Ontario Auto Insurance Companies Hike Rates Once Again and Injured Drivers Get Less

by Kris Bonn
Auto insurance rates climbing in Ontario

Two stories in the news this week offer an illuminating juxtaposition of auto insurance in Ontario. They show that the system is out of balance for the benefit of insurance companies and at the expense of Ontario citizens.

 On February 9, 2020, the Toronto Sun ran a story about the secret $40,000 deductible that applies to reduce an innocently injured person’s recovery for pain and suffering. 

As a personal injury lawyer helping those injured in car collisions, I have long known about this deductible on a person’s pain and suffering damages. The cruel reality is that we are not allowed to tell a jury about this deductible on a person’s damages at trial. The jury, thinking that they are being fair, might award an injured person $80,000 for pain and suffering and not realize that the deductible will reduce that amount to $40,000. Why should the innocently injured person pay for the bad driver’s negligence? If anything, the bad driver should pay the $40,000 to the insurance company; that would be a real incentive for safer driving.

The following day, on February 10, 2020, the CBC reported that insurance companies in Ontario requested and received the right to increase premiums by as much as 11 percent in 2020. This is, without question, unfair. Insurance rates have been steadily increasing over the last 3 years. In fact, if you were to check your auto insurance rates, you can expect that you are likely paying about 20 percent more in 2020 than you were paying in 2017. 

The auto insurance industry in Ontario needs to be checked. First party accident benefits are being cut, the increasing deductible on pain and suffering damages continues to reduce legitimate compensation to innocently injured people and yet insurers continue to hike rates. Something has to change.

Transparency and the need for change

The first step toward change is to require all insurance companies who provide auto insurance in Ontario to be forced to disclose exactly how much they earn on auto insurance. Currently, there is no requirement for insurance companies to separate out what they are making in Ontario on auto insurance. They simply lump this amount in with their general financial performance. This makes it very difficult to know the true situation in Ontario. If there is nothing to hide, the auto insurers should come clean and tell Ontario drivers how much they are making on auto insurance in our Province. We are entitled to transparency and accountability from the auto insurance industry. 

Restore balance to a broken system 

The current system is broken and needs a complete overhaul. I propose that we go back to the time before no-fault insurance was the norm. We should reduce the mandatory no-fault benefits to a bare minimum, with the option for drivers to buy more and at the same time remove the limitations and arbitrary reductions on an innocent person’s recovery. This will put those citizens injured by a motor vehicle on par with those injured by medical malpractice, slip and falls or other wrongful conduct.

Eliminate the unfair secret deductible on pain and suffering damages. Restore full recovery for loss of income. Currently, someone injured by a motor vehicle is only able to claim 70 percent of their loss of income before trial. Why are victims of motor vehicles treated differently than other victims in our civil justice system? We need a change and it should start this year, in 2020 with the Ford government taking bold steps to restore balance to the system.