2 May 2018 13:30
Photo : Freepik
The ontario drivers have paid five billion dollars (G$) bonus too in five years, according to a report from the Schulich School of business theUniversity of York. The surplus is equivalent to a surplus of $ 143 per insurance policy per year.
The report, conducted by Fred Lazar, a professor at the Schulich School of business York University, argues that the automobile insurers in Ontario have achieved a pre-tax income of$ 1.5 billion in 2016, representing approximately 60 % increase over the past four years. He added that the surplus of$ 5 billion represents 9.5% of the total premiums paid during the same period.
Gap between costs of coverage and premiums
“This increase is probably due to a widening gap between the reductions of the cost of coverage claims and the cost of the premiums. In 2011, for example, claims average per vehicle decreased by 27 %. Premiums, in contrast, have barely declined, ” says Mr. Lazar.
According to the Groupement des assureurs automobile (GAA), the average premium of auto insurance in Ontario was 1 $ 437 in 2016. In comparison, the average premium in Quebec was of $ 661 in Quebec the same year.
For nearly a month of the next provincial election in ontario, theOntario Trial Lawyers Association (OTLA), which commissioned the report, concludes that the system of automobile insurance in Ontario must be the subject of debate during the election campaign. The association is of the opinion that the premium increase in conjunction with profits “excessive” of insurers is a problem.
“The results of the report show the need to completely rethink the system of automobile insurance in Ontario. We can see to what point our system is completely dysfunctional, ” says the president of the OTLA, Claire Wilkinson. It adds that ontario’s system is rather figure of the “bad example” in the field of motor insurance.
The next provincial election in Ontario held on June 7.
A call for transparency
The OTLA calls for greater transparency about profits made by the industry of automobile insurance.
“By increasing transparency, the government and consumers would better understand the benefits that are currently gaining the auto insurance companies Ontario. This would be the first step towards a re-balancing in order to ensure justice to the victims of accident and fairness to the drivers, ” says Ron Bohm, president-elect of the OTLA.
In Ontario, the insurer establishes the liability and indemnify the insured in part, but the latter may also sue another driver in order to have extra compensations. The law in ontario, the minimum coverage liability is $200,000.