Insurance Premiums Continue to Rise While Benefits to Victims are Decimated

Toronto Personal Injury Lawyer Albert Conforzi: Andrea Horwath, leader of the Ontario NDP, is calling for a 15% reduction in auto insurance premiums for motorists in Ontario.

She commented on the nearly $2 billion in savings achieved by the industry as a result of the amendments that decimated benefits to victims in September, 2010. In spite of the savings, premiums have continued to rise. She cited that, for example, in 2011 premiums went up by 5%. From the CBC:

Major changes to auto insurance regulations in 2010 "dramatically" reduced benefits for drivers and turned out to be a huge "bonus" for companies, Horwath said. In 2011, the value of statutory accident payouts dropped by 50 per cent from the year before, to just under $2 billion, she said.

"Ontarians are tired of waiting," Horwath said. "Changes have been made to the Ontario insurance system that have allowed the companies to have far, far less in their payouts. And yet, that's not being realized in savings, in rates, to Ontarians."

Her proposal was part of the NDP wish list that is being thrown at the Liberal minority government as the price for continued NDP political support.

The immediate response from the insurance industry was twofold, and didn't surprise me in the least. One, that 77,000 jobs would be lost if premiums were reduced. Two, that what is really needed are anti-fraud measures recommended last fall by an anti-fraud task force.

Since 1990, Ontario motorists have had a succession of insurance regimes foisted upon it by an insurance industry that is truly gifted at finding someone to blame as a means to extract concessions from the government.

Insurers are masters of misdirection: lawyers, rehab facilities, doctors, fraudsters. I wonder who they'll blame next?

Originally, it was lawyers who were to blame for high insurance premiums. The government responded by giving insurers a no-fault system, combined with a tort threshold designed to eliminate the vast majority of bodily injury claims.

When premiums continued to rise, the insurers blamed the rehabilitation industry, who were claiming too many of the benefits that were available. The government amended the policy again at insurers' behest, but premiums continued to rise.

Then insurers blamed doctors, whom insurers thought were claiming too much money for the costs of medical assessments. The government again gave the industry what they wanted. And yet again, the premiums continued to rise.

The September 2010 amendments were demanded by insurers because there were just too many benefits available to victims. Therefore, what was needed was more choice. Optional benefits were introduced to give people more than basic coverages. Of course, very few people know about the options and even fewer can afford them. And yes, premiums still rise.

The latest bogeyman for the industry is fraud. According to the insurance industry, the system (which was created and repeatedly changed at their behest) has too much fraud in it. If only the fraud could be curtailed, they say, then premiums would come down.

Right.

I have previously blogged about insurance fraud. Fact is, the cost of fraud to the system has long been present and has long been built into the premiums.

Insurers are masters of misdirection: lawyers, rehab facilities, doctors, fraudsters. I wonder who they'll blame next?

Caught in the middle of all this, of course, are victims. For more than 20 years, we have seen an erosion of the rights of victims, while insurers have continued to amass profits. So when they respond to Andrea Horwath's call for a reduction in premiums, forgive me if I don't believe a word that the industry says in response.

I have long said that insurers in Ontario will not be happy until they can collect premiums without having to pay benefits. I still feel that way.

Albert Conforzi is a personal injury lawyer with Pace Law Firm in Toronto. His posts generally appear on Mondays.