Insurance News – Monday, August 24, 2015

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Monday, August 24, 2015:

  • The puzzle of reforming Michigan no-fault auto insurance.
  • Market dynamics: Uber and the future of automated cars.
  • With the help of new technology services such as Uber, Lyft and Sidecar (ride sharing services) and FlightCar, GetAround and RelayRides (car sharing), this industry is among the fastest-growing in America and around the world.
  • Factors unrelated to driving can affect car insurance.
  • Mapping the link between obesity and car driving.
  • Waterloo moves forward to regulate Uber and other ride sharing services.

Insurance News – Friday, March 20, 2015

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Friday, March 20, 2015:

  • Driveless cars may drive down your insurance costs.
  • Not surprising, some insurance companies have suggested that driverless cars  may be a possible financial threat.
  • Google has announced the introduction of a United States version of its Google Compare auto insurance shopping site, which has been operating in Britain for two years.
  • Who is going to own and control the automotive market when driverless cars are introduced? Car manufacturers or technology companies?
  • Uber and Lyft fail to convince judges their drivers are merely ‘contractors’.
  • Uber’s “low-cost” UberPop service has been banned in Germany after a court decided it violated transport laws.

Insurance News – Thursday, July 31, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Thursday, July 31, 2014:

  • It took a while but a Toronto-based staged collision ring has been slapped with more than $800,000 in fines and restitution for false insurance claims that contributed to more than $4 million in fraudulent claims.
  • Auto insurance and ridesharing: When personal and business uses of a vehicle converge, coverage confusion arises.
  • Men and women can both be terrible drivers but in different ways.
  • A look at the public v. private auto insurance debate – which works better?
  • Is it true that low highway speed limits mainly benefit auto insurance companies in the form of higher premiums?
  • A published study suggests that enforced laws banning texting produced 3% reduction in traffic fatalities for all ages.

Insurance News – Thursday, May 28, 2015

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Thursday, May 28, 2015:

  • Google’s price comparison site in the US and UK is shaking up the insurance industry.
  • Autonomous cars will destroy millions of jobs and reshape the US economy by 2025.
  • A new survey suggests Canadian drivers acknowledge distracted driving is a problem on our roads – but they’re not willing to take the blame.
  • Taxi drivers protests against Uber is a futile attempt to resist technology.  Uber is here to stay, and that’s a good thing.
  • Ontario is pledging $1 million to support projects through the Connected Vehicle/Autonomous Vehicle Program.
  • With Uber making deeper in-roads into the taxi business, Toronto cab companies are fighting back with apps of their own, which offer many of Uber’s features including credit card payments and GPS tracking.

Insurance News – Saturday, May 14, 2016

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Saturday, May 14, 2016:

  • Is an outdated loyalty system the only thing keeping brokers from oblivion?
  • Canadians can now rent their personal vehicle to others through a U.S. company that has just launched in this country. It’s like AirBnB for car owners. But should you do it?
  • A new ride-hailing app made exclusively for women will now launch in the U.S. nationwide this fall after being met with overwhelming demand from users.
  • Auto insurance rates in Ontario have dropped about 10 per cent on average in the past few years, putting the Liberal government two-thirds of the way to a goal that passed eight months ago.
  • Who’s responsible when a self-driving car crashes? In short term it will be drivers but in long term it will likely be manufacturers.
  • Classifying the different levels of vehicle autonomy. Most cars will not be at the top level for many years.

Insurance News – Thursday, July 3, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Thursday, July 3, 2014:

  • Finance Minister Charles Sousa says Ontario Liberal government is still committed to lowering auto insurance rates by 15% by August 2015.
  • Google and Detroit on a collision course regarding self-driving cars and car ownership. The auto makers are focused on accident avoidance systems while Google is talking about moving from an ownership model to a service model.
  • Should the blind, drunk and elderly be allowed to operate driverless cars? The road rules may need to change.
  • According to a recent survey of women in the insurance industry. leadership roles in the industry still lack gender diversity.
  • Carfax has expanded Damage Reports for Canada auto dealers.

Insurance News – Wednesday, July 2, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Wednesday, July 2, 2014:

  • Car-sharing companies and insurers are in a state-by-state battle over their business model.
  • How Google might put taxi drivers out of business.
  • Meet Ray, the self-driving forklift that is parking cars at a German airport.
  • The OPP suggesting distracted driving could be the cause of over 50% of accident (I think there is under-reporting).
  • A great article about seniors driving. The numbers are growing despite declining physical abilities.

More Benefit Cuts Coming for Ontario Auto Insurance Consumers

It seems the road to more affordable auto insurance once again winds its way through further benefit cuts.  Those aren’t the only changes proposed in the 2015 Ontario Budget but it remains an ongoing piece of controlling the cost of Ontario premiums.  Many of the changes announced by Finance Minister Charles Sousa on April 23rd lack any details so how they would be applied or implemented is very much in the air.

Mandatory medical, rehabilitation and attendant care benefit coverage has again been lowered.  The combined coverage will be $65,000.  The combined mandatory coverage had been $172,000 since 1996.  In 2010 it was reduced to $86,000.  For catastrophic injuries, the combined coverage has been $2 million since 1996.  The coverage will now be $1,000,000.  With exception of children and catastrophic injuries, medical and rehabilitation benefits will only be able to be claims for a period of five years instead of ten.  Optional coverage will continue to be available but few consumers purchase and many brokers and insurers discourage consumers from purchasing them.

Subsections 15 (h) and 16 (l) of the SABS are basket clauses to cover medical and rehabilitation goods and services not specifically listed in the schedule.  The government proposes to change the entitlement test for these to clauses from “reasonable and necessary” to “essential”. Yet a new term and complexity is to be introduced to the SABS and be subject to years of disputes.

The Superintendent of Financial Services recommended changes to the SABS definition of catastrophic impairment in a report back in 2010.  The recommended changes have been a contentious issue and the government has indicated an intention to make changes in the past few budgets.  This commitment has again been announced as part of the 2015 Ontario Budget.

Finally, the non-earner benefit is to be restricted.  The benefit was introduced in 1990 with the OMPP, the first no-fault system in Ontario.  Since that time, entitlement has been gradually been restricted.  The proposed change will limit entitlement to two years.

Some of the cost savings introduced by reducing standard SABS coverage will shift to the tort just as it did following the 2010 reforms.  However, the government is also looking to introduce cost savings on the tort side.  Changes will be made to the compensation available through a court action. The non-pecuniary deductible (for pain and suffering) was increased in 2003 and has not been changed since then.  It will be increased to reflect inflation since 2003 and indexed in the future.  Also adjusted will be the monetary thresholds beyond which the tort deductible does not apply (e.g., the $100,000 threshold at which the deductible no longer applies).   Finally, judges will be able to take int account the effect of the tort deductible when determining a party’s entitlement to costs in an action.

Insurers will be expected to provide some additional cost savings for consumers.  The maximum interest rate that can be charged on premiums paid on a monthly basis is to be reduced from three percent to 1.3 percent.  All insurers will be required to offer a discount for the use of winter tires.  The budget announcement does not stipulate the amount of the discount but some insurers already offer such a discount and it is typically in the three to five percent range.

The most appealing change for consumers is a commitment to prohibit premium increases for minor at-fault accidents that meet certain criteria.  Those criteria have not been identified but I would expect the circumstance to be quite limited.  For example, it would not included any accidents where an injury was reported.  The question to be asked is where will those costs migrate to?  If insurers cannot increase premiums to drivers with minor accidents, will those costs shift to drivers with more serious accidents or all drivers which would include those with no accidents?

Finally, the standard deductible for comprehensive coverage will increase from $300 to $500.  A meaningless change based on past experience.  A number of years ago the government increased the standard deductible for direct compensation property damage (DCPD) coverage from $0 to $300.  However, brokers and agents continued to recommend the $0 deductible to consumers.  The opportunity to reduce premiums by accepting a higher deductible has always existed but many consumers do not take advantage of it.

There is a small obscure reference on page 103 to support regulatory and tax environment can help innovation thrive. This partly is aimed at transportation network companies such as Uber.  To help emerging sectors thrive, the government commits to working with firms and industries to help them comply with existing obligations and to consulting on an ongoing basis to ensure those obligations reflect a changing economy.

The government continues to tinker with the Ontario auto insurance product, which has been the order of the day since the OMPP was introduced on June 22, 1990.  In the May 2015 issue of Canadian Underwriter, I will look back at the past 25 years and discuss what has gone wrong. Please look out for it.

Insurance News – Friday, June 20, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Friday, June 20, 2014:

  • IBC will be lobbying for more auto insurance reforms in in Ontario now that there is a majority government.
  • Why it’s so easy to steal from insurance companies – and what to do about it.
  • Should Canada revisit credit rating for auto underwriting?
  • Auto insurance claims drop with Honda collision warning system – a taste of what driverless cars can offer.
  • So what happens when two self-driving cars are at an intersection and their clocks tell them both they arrived first?
  • FSCO has revised the Standard Benefit Statement that insurers must send to claimants every 2 months beginning Sept 1.

Are Insurers Using Cost Control Tools Properly?

I noticed an interesting section at the end of a recent bulletin issued by FSCO regarding recent regulation changes that I reviewed in a recent post.  Thrown in with the announcement of regulatory changes is a discussion on mileage expenses by health care providers.

The bulletin goes on to state that FSCO is aware that some health care providers are submitting mileage expenses to insurers to travel to an injured accident victim to provide services. Insurers are reminded that “authorized transportation expenses”, as defined in the SABS, are intended to apply to expenses incurred by the insured person and not health care providers.  Details of what can be claimed by insured persons are subject to the Superintendent’s Transportation Expense Guideline.

The bulletin also reminds insurers that hourly fees in the Superintendent’s Professional Services Guideline include all administration costs, overhead, and related costs, fees, expenses, charges and surcharges. Insurers are not liable for any administration or other costs, overhead, fees, expenses, charges or surcharges that have the result of increasing the effective hourly rates, or the maximum fees payable for completing forms, beyond what is permitted under the Professional Services Guideline.

My guess is that these aren’t just friendly reminders.  More likely FSCO has become aware that health care providers are submitting for mileage and other expenses related to treatment of insureds, and insurers are paying them.  While the industry is lobbying government to reduce costs in the system, insurers are paying for expenses that do not fall under the SABS.

Having worked for the government for many years I am fully aware of the amount of lobbying in which stakeholders partake.  Insurance companies are not shrinking violets when it comes to lobbying efforts.  There is a constant list of suggested changes presented to government officials to reduce the cost of auto insurance.

It was frustrating to work on endless changes to the system that will never be fully utilized. We now have a complex set of rules, many proposed by the insurance industry, that are not always being used. It is a system that is too complex for many to properly understand and use.

Yet the government keeps churning out more regulation and rule changes to drive down costs.  But growing red tape and complexity likely have the opposite affect.  Transactional costs keep going up for insurers, health care providers and legal representatives which ensures that the price of auto insurance in Ontario remains high.

As the service provider licensing system is rolled out and soon to be followed by a new minor injury protocol I wonder which direction costs will go – up or down.