In March 2013, the Liberal government tabled a budget that promised to decrease private auto insurance by 15 per cent. (Photo: REUTERS/Mark Blinch)
The Financial Services Commission of Ontario has announced that it approved an increase in auto insurance rates which came into effect at the end of June.
FSCO is a government agency that regulates insurers in Ontario.
FSCO explained, “Fourteen insurers representing 30.06% of the market based on premium volume had rates approved in the quarter. Approved rates increased on average by 0.33% when applied across the total market.”
While some insurers have kept their premiums the same and one even decreased its premiums, others increased their premiums, including RBC General Insurance and TD General Insurance, which increased their premiums by more than three per cent.
FSCO also says that there was an average decrease in rates of 3.07 per cent for the first quarter of 2016 but that was done in order to have cuts to drivers’ accident benefits approved.
However, this most recent insurance increase flies in the face of the provincial government’s promise to actually lower rates.
In March 2013, the Liberal government tabled a budget that promised to decrease private auto insurance by 15 per cent. The budget passed but the deadline to implement the cuts to auto insurance by August 2015 never really materialized, although FSCO says that rates are down on an average by 10 per cent since 2013.
In response to missing the deadline, Ontario Premier Kathleen Wynne said in January 2016, that the 15 per cent reduction was really a “stretch goal.”
Fast forward to July 2016, when it’s being reported that car insurance premiums have increased, which is strange given accident benefits awards have just been cut last month by substantial amounts.
How substantial were the cuts to accident benefits entitlements of Ontario drivers?
As of June 1, 2016 some benefits cut include:
FSCO stated that the reason for the changes was to “help make insurance premiums more affordable.”
It doesn’t really look like auto insurance premiums are more affordable if rates are going up.