TORONTO, April 10, 2015 /CNW/ - 40%: That's the share that some personal injury lawyers in Ontario take from accident victims in contingency fees. While many lawyers take less – a quarter or a third – insurers and drivers all agree: lawyers' fees are simply too high and have a significant impact on the cost of auto insurance.
Today, the Ontario Trial Lawyers Association (OTLA) released a self-funded "study" about auto insurance companies and rates. The OTLA report questioned insurers' Return on Equity (ROE). The authors of the "study" are reaching completely misleading conclusions about the insurance industry profits by excluding 1/3 of the industry. That same "study" clearly states that when including the performance of all insurers in the province, the return for the industry was -1.1% in 2001-2011, 4.2% in 2012 and 2.4% in 2013.
"Real reforms to the auto insurance product have been ongoing and continue and are reducing the cost of auto insurance in Ontario," said Ralph Palumbo, Vice-President, Ontario, IBC. "If the lobbyists and well-heeled lawyers want to know who is driving up insurance costs, they need to take a look in the mirror. Personal injury lawyers and their sky-high fees are putting justice out of reach for too many Ontarians. Perhaps it is time that lawyers also reduce their fees to further reduce costs to consumers."
In 2013, lawyers received an estimated $500 million from injury claimants out of their insurance settlements for bodily injury claims. These are real dollars that never make it to the claimant. IBC will continue to fight for increased transparency so that consumers can actually see where their insurance dollars go.
Premiums charged by insurers are regulated by the provincial government and are transparent in terms of what fees and premiums are charged to consumers. "Shouldn't lawyers be required to submit to the Superintendent of Insurance all information about their fees – including contingency fee arrangements, disbursements, court-awarded and settled costs, and referral arrangements? Wouldn't this be in the best interest of injured victims?" Palumbo asked.
"We continue to work on solutions aimed at bringing down the cost of premiums for Ontario's drivers," Palumbo added. "This, of course, is not easy, but it can be done. The insurance industry is working successfully with the Ontario government so that the auto insurance product works for consumers."
About Insurance Bureau of Canada
Insurance Bureau of Canada (IBC) is the national industry association representing Canada's private home, auto and business insurers. Its member companies make up 90% of the property and casualty (P&C) insurance market in Canada. For more than 50 years, IBC has worked with governments across the country to help make affordable home, auto and business insurance available for all Canadians. IBC supports the vision of consumers and governments trusting, valuing and supporting the private P&C insurance industry. It champions key issues and helps educate consumers on how best to protect their homes, cars, businesses and properties.
P&C insurance touches the lives of nearly every Canadian and plays a critical role in keeping businesses safe and the Canadian economy strong. It employs more than 118,000 Canadians, pays $6.7 billion in taxes and has a total premium base of $48 billion.
For media releases and more information, visit IBC's Media Centre at www.ibc.ca. Follow IBC on Twitter @InsuranceBureau and @IBC_Ontario or like us on Facebook. If you have a question about home, auto or business insurance, contact IBC's Consumer Information Centre at 1-844-2-ASK-IBC.
SOURCE Insurance Bureau of Canada
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