Ontario auto insurance companies pocket massive profits while accident victims get shortchanged, and drivers continue to pay excessive rates
TORONTO, Oct. 15, 2015 /CNW/ - An updated study released today provides alarming new data on auto insurance in Ontario.
The study, conducted by York University Schulich School of Business Professors Fred Lazar and Eli Prisman, reveals that consumers likely overpaid by $1.5 billion in the last two years alone. This includes overpayments of $700 million (or about $100 for each insurance policy) in 2014 on top of the $840 million ($120 per policy) in 2013.
The Ontario Trial Lawyers Association (OTLA), which commissioned the report, concludes that Ontario's auto insurance system - where drivers pay too much, insurers reap excessive profits and victims get shortchanged - is fundamentally broken.
A copy of the study is available here
"Clearly Ontario's auto insurance system is in deep trouble," said Maia Bent, President of OTLA.
"Not only are drivers paying through the nose, but the policy is not worth the paper it's written on. Victims are being seriously hurt and it's about to get even worse when further reductions are implemented. It is not an exaggeration to say that we are fast approaching a crisis for accident victims."
"These repeated 'insurance reform initiatives' have clearly only benefited insurance companies by generating record profits," she added. Total industrywide profits in 2014 alone were 10.6 per cent – or nearly twice the levels considered reasonable.
Again, OTLA also strongly recommends that Ontario's Auditor General conduct a fully independent review of auto insurance in Ontario – focused on premiums, insurance coverage and industry profits. "We need a critical re-examination of auto insurance in Ontario and the auditor is well positioned to provide a truly independent review. At a minimum, we need to advance the discussion about auto insurance beyond the simplistic idea that the only thing that matters is the price we pay," she said.
OTLA welcomes the recent Ontario government appointment of David Marshall as a special advisor on auto insurance.
"We look forward to working with David Marshall and with all stakeholders in the auto insurance system. We need real reform initiatives that strike an appropriate balance among all interests - that means fair and affordable premiums, appropriate and timely treatment for victims, as well as reasonable profits for insurers."
"We have a long way to go to restoring balance and ensuring justice for accident victims and fairness for drivers," Ms. Bent added.
About the Ontario Trial Lawyers Association: Founded in 1991, the Ontario Trial Lawyers Association (OTLA) is an organization of more than 1,600 plaintiff lawyers, law clerks, articling students and law students. Our purpose is to promote access to justice for all Ontarians, preserve and improve the civil justice system, and advocate for the rights of those who have suffered injury and losses as the result of wrongdoing by others, while at the same time advocating strongly for safety initiatives. For more information, visit www.otla.com and www.truthaboutinsurance.ca.
SOURCE Ontario Trial Lawyers Association
For further information: John Karapita, Director of Public Affairs, OTLA, Tel: 289-242-8577