Ontario’s auto insurance system is flawed, to put it mildly. Despite paying some of the nation’s highest premiums and driving on some of its safest roads, Ontarian accident victims often struggle to get by on the benefits they receive. Many personal injury lawyers in the province believe reforms to lower premiums and improve coverage are necessary.
A private member’s bill working its way through the Ontario legislature could be a step in the right direction. Ontario Bill 42, introduced by Conservative MPP from Milton Parm Gill, would prevent insurance providers from using postal code data as a primary factor to calculate rates. Under current legislation, insurance providers are able to divide the province into a maximum of 55 territories, up to ten of which can be in the City of Toronto. If you happen to live in a high-risk territory, your premiums will be higher than those of a driver with a similar record who happens to live in a lower-risk territory.
For example, the Toronto Star spoke with Pankaj Sallh, an engineer who recently moved from Mississauga to Brampton and saw his insurance rates jump from $237 to $350 a month.
“To me, it’s unexplainable,” Sallh told the Star. “Why should I pay more just because of the change of address?”
Geography isn’t the only factor determining premiums. Insurers also consider drivers’ records, age, gender, marital status, vehicle make, and usage patterns. But postal codes are a defining factor. As a result, a person with a clean driving record will pay more in Brampton than a person with a clean driving record in Mississauga, without access to additional benefits.
“My bill will create a fairer market, encourage more personal responsibility, foster more competition and ultimately benefit good drivers in our province,” Gill wrote in a Toronto Star op-ed.
However, the insurance industry steadfastly believes that geographic information must play a role in determining rates. Indeed, industry experts believe more robust data is the key to reducing premiums for safe drivers.
“Insurers have been asking the government for years for a system where the very specific location of an individual matters significantly more than it matters now,” wrote Kim Donaldson, Ontario region vice-president for the Insurance Bureau of Canada in an op-ed responding to Gill’s piece.
This would allow “a good driver with a good record, who happens to live in a neighbourhood that has lots of claims,” to avoid “paying as high a premium as their neighbor who has a poor driving record.”
For Ontario’s personal injury lawyers, the issue at the heart of this debate is value. Good drivers with clean records paying elevated premiums due to their home address are emblematic of a much larger problem: that Ontarians are not receiving good value for the cost of their insurance.
Having worked for decades with seriously injured accident victims across the province, Neinstein Personal Injury Lawyers understands that motor vehicle injuries can present devastating physical, mental, and financial problems. If you’ve been injured and are concerned with access to accident benefits through your insurance, contact Neinstein today to arrange a free, no-obligation consultation.
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