Halifax, Nova Scotia — March 2, 2015
Insurance Bureau of Canada (IBC) President and CEO Don Forgeron recently discussed the province’s successful auto insurance reforms at the Halifax Chamber of Commerce.
The organization says it wasn’t that long ago that auto insurance in Nova Scotia was in crisis, with insurers paying out more in claims than they were collecting in premiums. Auto insurance became expensive and difficult to get, leading to the unhappiness of consumers.
This is no longer the case, IBC says.
“Today, premiums in Nova Scotia are among the lowest in the country. Auto insurance is affordable, and Nova Scotians have access to the benefits they need, when they need them,” Forgeron told the Halifax audience at the February 26 meeting. “Since the reforms, the average cost of auto insurance in Nova Scotia has dropped almost 27 percent.”
IBC says fixing auto insurance was no easy feat, taking leadership, cooperation and hard work on the part of governments, insurers and many other stakeholders. Governments of differing political backgrounds saw past their differences and supported changes that led to an auto insurance system that is now the envy of many provinces.
The Ontario government and insurers currently face problems similar to Nova Scotia’s issues prior to reforms. Ontario’s nine million drivers consistently pay the most for auto insurance in Canada, with claims costs being extremely high compared to other jurisdictions. In 2013, the average cost of an accident benefit claim payout in Nova Scotia was $8,600. In Ontario, it was $31,785, the insurance organization says.
One of the biggest problems facing Ontarians is that there are too many players looking for a piece of what they see as the “car accident business,” a viewpoint that is driving up premiums, IBC says. The organization believes these players are draining resources and, in some cases, defrauding the system by staging collisions, falsifying medical claims and embellishing collision repair costs.
In Ontario, only 57 percent of payouts actually go to the accident victim, the rest is used to cover expenses unrelated to treatment and lost income.
“We continue to work to bring down the cost of premiums for Ontario’s drivers and we are doing so in the same way we did in Nova Scotia: Through leadership, hard work and cooperation,” Forgeron says. “This, of course, is not easy, but it can be done. The private sector can work successfully with governments of all political stripes so consumers can come out on top. Nova Scotia is proof of that.”
