Another Ontario Election, Another Promise to Lower Auto Insurance Rates

The NDP May Be the Go-To Party to Cut Rates, But Will They? Can They?

A News Commentary by Niagara At Large reporter and publisher Doug Draper

Posted May 12^th, 2022 on Niagara At Large

It must be election time in Ontario because here we voters are again, facing another promise from one of the provincial parties to lower those bank-busing auto insurance rates.

 

Maybe I’ve been around too long, covering too many elections, but I’ve heard promises to lower auto insurance rates before and nothing ever comes from them.

The first time I recall hearing this promise in a big way was back around 1990 when the Ontario New Democratic Party, then led by Bob Rae who would later switch to the federal Liberals and now serves as Canada’s ambassador to the United Nations, promised lower rates as part of a grander plan to and a larger plan to switch to a not-for-profit public insurance system across the province.

However, after Rae’s NDP formed a government it was met with tremendous opposition from private insurance companies and the promise was abandoned, much to the chagrin of then Niagara Centre NDP MPP Peter Kormos, who was serving in Rae’s cabinet at the time, and his Niagara Centre predecessor Mel Swart – both of whom had been longtime champions for a public insurance system.

So now we have a the province’s NDP promising, once again, to at least lower auto insurance rates and despite past misfires, I am not prepared to give up on the idea that if Andrea Horwath and her New Democrats form a government, they won’t give it a good honest try and that they might even succeed in doing it.

I am posting the news release Horwath and her party circulated this May 11^th on their plan to cut the cost of auto insurance.

But before I do, I just want to express a hope that if an Ontario NDP governments is elected and gets a chance to do this that the commission it would  launch to investigate ways of making insurance more affordable takes a good hard look at the auto body repair industry and how much price gouging may be going on.

I would be willing to bet that if such a commission hired a panel of experts in the field of repairing car bodies and tried taking damaged cars to auto body shops after appraising the real cost of having them fixed, it would be shocked at some of the estimates it comes back with.

Frankly, I can’t believe that auto insurance companies haven’t already done that. Have they got something on the go with the body shop industry?

Now here is the news release on the plan Horwath and her party have put on the table in this Ontario election for  reducing auto insurance rates –

PRESS RELEASE, May 11, 2022

As premier, Horwath will lower auto insurance rates by 40 per cent

Ontario to study public auto insurance — like Quebec, Manitoba, B.C. and Saskatchewan

BRAMPTON – NDP Leader Andrea Horwath will lower auto insurance rates by 40 per cent by fixing the auto insurance industry, saving drivers an average of $660 every year. In some communities, like Brampton, the savings will be upwards of $2,000.

To do it, she’ll end postal code discrimination and ban auto insurance rate increases for 18 months while an expert commission investigates and recommends a new system — a public or partially public system, or major reforms to the private system.

“It’s been getting a lot harder for everyday families to afford everyday life. They just want to get back on solid ground again, and we can help them do that by making auto insurance more affordable,” said Horwath. “Let’s stop paying more for auto insurance just because of where we live. The auto insurance system is broken, and together we can fix it — and put $660 a year in people’s pockets.”

Ontario has some of the most expensive auto insurance premiums in the country, despite some of the lowest rates of auto accidents. The average annual rate in Quebec is $851. In Ontario, it’s $1,655. For some Ontario drivers, rates are more than $6,300.

In 2021, drivers on average paid premiums 50 per cent to 72 per cent higher than British Columbia; 55 per cent to 65 per cent higher than Manitoba; and 79 per cent to 116 per cent higher than Saskatchewan.

Horwath and the NDP’s plan for auto includes:

* Immediately ending postal code discrimination. Postal code discrimination means that drivers in many neighborhoods pay dramatically higher rates than drivers anywhere else, even if they have the same age, experience, car and driving record.

* An 18-month ban on raising insurance rates.

* Immediately striking the Ontario Auto Insurance Fair Pricing Commission, led by insurance experts, affordability advocates, and experts in public auto from provinces who use a public insurance system. The commission will be directed to explore:

1. + A full public no-fault insurance system like Manitoba, Saskatchewan and British Columbia have
2. + Quebec’s hybrid public and private model
3. + A private no-fault system
4. + Specific reforms in legislation leading to permanent rate reductions

In 2020, despite a drop in claims, Ontarians paid higher auto insurance rates and Ontario auto insurers made $3.63 billion in profits.

The Ford Conservatives voted against a 15 per cent auto insurance premium reduction and against ending postal code discrimination. The Ontario Liberals promised to lower auto insurance rates by 15 per cent, then chose not to. Kathleen Wynne later said the promise was actually a “stretch goal.”

NIAGARA AT LARGE Encourages You To Join The Conversation By Sharing Your Views On This Post In The Space Following The Bernie Sanders Quote Below.

“A Politician Thinks Of The Next Election. A Leader Thinks Of The Next Generation.” – Bernie Sanders