Insurance News – Tuesday, January 26, 2016

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Tuesday, January 26, 2016:

  • Town of Stratford has built connected infrastructure to attract self-driving cars for testing over the past decade.
  • Uber’s impact being felt as San Francisco’s largest cab company Yellow Cab to file for bankruptcy.
  • Why baby boomers embrace sensor-driven cars, but doubt self-driving cars.
  • While claiming their self-driving cars have not caused an accident, Google also reports self-driving car mistakes: 272 failures and 13 near misses.
  • Google wants to form more partnerships with automakers and suppliers in 2016 to accelerate work on self-driving cars.
  • Obama boosts self-driving car development with $4 billion investment.

David Marshall’s report on auto insurance, Fair Benefits Fairly Delivered.

Back in April, David Marshall’s report on auto insurance, Fair Benefits Fairly Delivered was submitted to the Minister of Finance. What followed was a consultation process, in which that I participated. On December 5, 2017, the government announced their plan to address fraud and high premiums. I was relieved to see that Marshall’s recommendation to create an independent evaluation centre network in public hospitals was abandoned. This is an op-ed piece I wrote, which was published in the Toronto Star in October that dealt with this specific issue.

Ontario’s crowded hospitals don’t need even more exams

Attempts by the province of Ontario to fix auto insurance could well end up causing more harm than good to the health care system.
Now, that’s not how it’s supposed to work. And that’s nobody’s intention. But we’d all have to live with the result.
Here’s how we got here: The provincial government is considering a round of reforms for auto insurance in Ontario, unfortunately without basing those decisions on decent data, evidence or analysis. If adopted, the end result is going to send more people, not fewer, to hospitals, and all at a time when overcrowding is already at crisis levels in the province.
We didn’t start out with a flawed system. Most people would agree that the introduction of no-fault auto insurance in Ontario was the right thing to do. Ontario drivers deserve an affordable system that provides coverage and protects accident victims and that’s what they got.
It didn’t last. The insurance industry began to pressure government to make changes. Political pressure then led to successive governments adopting half-baked, knee-jerk solutions to auto-insurance delivery — anti-fraud measures were implemented, a licensing regime was created, a new dispute resolution system was put in place, basic accident benefit coverage was reduced.
Since 2010, there have been more than 30 changes to auto insurance regulations, most, if not all, with the intention of lowering costs. Few people will suggest the system has actually been improved in that time.
The government is now considering another round of reforms. This time it’s through David Marshall’s report on auto insurance, Fair Benefits Fairly Delivered.
But these changes, if adopted, will be no more successful than the previous reforms. One of the most alarming is the suggestion that medical exams, when required after an accident — which are currently done in independent medical centres — should happen in hospitals.

That is robbing Peter to pay Paul. Actually, it’s worse than that. It’s trying to fix one system while hurting a far more essential one. Current OHIP patients typically wait six to 30 months to see a specialist for an assessment. According to a recent story in the Toronto Star, it now takes 30.4 hours to be placed in an inpatient bed from the emergency department in the province. That’s the longest it’s ever been. There’s no way this helps with that problem.
I had the lead in developing and introducing the system which saw independent medical assessments being done as part of auto insurance claims, back in 1994. In the beginning, some were conducted in hospitals.
That didn’t last. While hospitals have different needs and resources, some could make better use of the space required, while others may not have had the patient volume to justify offering the assessments. Still more may have had trouble simply finding assessors. On the whole, hospitals decided on their own their resources were needed elsewhere. There’s no doubt that’s true.
The other troubling recommendation the province is considering is a proposal to adopt a controversial Workplace Safety and Insurance Board model for auto insurance medical exams. The systems aren’t transferable. For example, the examiners in the WSIB system don’t appear as witnesses in disputes. But disputes are built into auto insurance claims. As a result, the proposed changes have the potential to add another layer of assessments and costs.
Changes can and should be made to auto insurance in the province. It would be better for the province to focus on standards for those who conduct the independent examinations — something that has been recommended many times in the past. But that’s one change that’s never been made.
The Marshall report indicates that this is “an opportunity to learn from past experience and fix the problems in the current auto insurance delivery system.”
I don’t see that happening. Instead, I believe that implementing this report would repeat past errors. We’ve had enough of those already.

Insurance News – Thursday, November 13, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Thursday, November 13, 2014:

  • Transcripts for public hearings on Bill 15, Fighting Fraud and Reducing Automobile Insurance Rates Act 2014 are now available online.
  • Owning a car is expensive.  So is ridesharing services like Uber cheaper than owning a car?
  • Why do so many consumers seek out “cheap” auto insurance given the expense of their new cars or trucks — easily $30,000, $40,000 or even $50,000 or more for high-end models?
  • Driverless car researchers develop plans to prevent hacking on the highway.
  • Your car may be programmed to kill you and 9 more fun facts about driverless vehicles.

What’s Driving Up Ontario Auto Insurance Rates?

Since becoming Premier, Kathleen Wynne focus on the auto insurance file has been to bring down rates. The government originally set a rate reduction target of 15%. After several years, the target was quietly abandoned. The government has done a lot of tinkering with the system without providing much rate relief to Ontario drivers.
During the past four years, the government has slashed mandatory coverage, transferred responsibility for disputes to the Licensing Appeal Tribunal and introduced further restriction on accessing the courts.
Major Ontario Coverages
Much of the reforms has focused on accident benefits coverage. However, accident benefits are only one of three major coverages. The others are third party liability and physical damages.
Industry data shows that physical damage claims are driving up the cost of auto insurance in Ontario. However, the government’s focus has been largely on accident benefits.
The chart below shows that between 2012 and 2016, claim costs rose 28.1%. While accident benefit costs rose 27.1% during that period, collision claims costs rose 49.9% and direct compensation claims costs 56.8%.
Increase 2012-16
Total claim expenses
Total AB expenses
Bodily injury claim expenses
DC claim expenses
Collision claim expenses
Comprehensive claim expenses
Why Are Physical Damage Claims Costs Going Up
A number of large insurers have recently announced that they plan to file for auto insurance rate increases in Ontario including Intact, Aviva and RSA Canada.
Intact indicates that new technologies and more expensive car parts have increased the cost to repair cars. Aviva blames escalating repair costs, distracted driving and fraud for rising claim costs. RSA Canada also blames the cost of auto repairs.
Distracted driving is causing an increase in the number of auto accident after years of falling accident frequency rates. Increased frequency rates also put upward pressure on third party liability and accident benefit costs. This explains why the reforms undertaken in Ontario over the past few years has had little impact on premiums.
The recently announced Ontario auto insurance action plan is not likely to significantly reduce rising auto insurance claims costs.
Possible Action
·         The government and industry need to direct more resources to preventing and prosecuting fraud.
·         A recent Aviva investigation reveals fraudulent activity continues to exist in the towing and repair of damaged vehicles. More comprehensive regulation of the towing and auto repair sectors is needed.
·         To address distracted driving, the penalties need to be as severe as those for drunk driving. The government could introduce administrative penalties for distracted driving. Introduce a requirement that would see cellular telephones blocked while a car is in motion.

Insurance News – Thursday, January 8, 2015

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Thursday, January 8, 2015:

  • Will Google cars eviscerate the personal injury bar?
  • With an aging population and reduced driving, what will happen to the industry if auto claims keep dropping?
  • California to offer low-cost car insurance (under $450) and drivers licences to illegal immigrant drivers to reduce the number driving uninsured.
  • The private company hired by the province to conduct all driving exams was failing to properly road test tractor-trailer drivers.
  • Ridesharing and Car Insurance: A little white lie?
  • It’s not just drunk and distracted drivers that are dangerous but drowsy drivers as well.

Anxiety and Depression Does Not Necessarily Exclude One From The Minor Injury Definition

A recent FSCO arbitration case (by an ADR Chambers arbitrator), Lo-Papa and Certas Direct, determined that the existence of anxiety and depression following an accident does not necessarily exclude one from the minor injury definition or the $3,500 treatment cap.

In Lo-Papa and Certas Direct, the claimant was involved in a MVA on October 20, 2010 and at the time of the accident complained of pain in her spine and head.  At the arbitration hearing she stated she suffered from headaches, lower back pain, leg pain. anxiety and depression.  Her physician confirmed that she suffered from anxiety and depression, but did not address the question of whether her anxiety and depression were the predominant impairments or whether her symptoms were not clinically associated sequelae and therefore, exclude her from the minor injury definition.

The arbitrator noted that, as confirmed in the Scarlett v. Belair appeal decision, the burden of proof rests with the claimant to show that her injuries fall outside the minor injury definition.  This decision confirms that a claimant can sustain psychological impairment in an accident and still fall under minor injury definition.  However, if the psychological impairment is predominant then it will likely be outside the minor injury definition and the $3,500 cap.

Insurance News – Thursday, June 11, 2015

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Thursday, June 11, 2015:

  • Google seems to be laying the groundwork to underwrite its own policies, displacing traditional insurance carriers.
  • Google has hit a significant milestone. Its self-driving cars have now covered over 1 million fully autonomous miles.
  • Google has started publicly disclosing details of accidents involving its self-driving cars. The company released the first of what it says will be monthly reports summarizing accident data and highlights from testing.
  • Getting a full discount with usage-based insurance can be tricky.
  • A recent survey shows that more men than women want to own an autonomous car, and more millennials than older generations.

Insurance News – Friday, November 20, 2015

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

  • Uber operations in Toronto spark possibility of strike in taxi industry.
  • Ontario highway incident management the “missing piece” of auto insurance fraud reform.
  • A fascinating article on how Uber manages the marketplace and why taxis are doomed.
  • Evolution of transportation may change the auto insurance industry.
  • The Florida Insurance Commissioner thinks it may be time to eliminate no-fault.
  • Toronto Star reports there is a lot of confusion regarding the snow tire discount that becomes mandatory beginning January 1.

Insurance News – Wednesday, October 14, 2015

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Wednesday, October 14, 2015:

  • Finance Minister Charles Sousa appoints David Marshall as auto insurance, pension advisor.  Are more reforms coming?
  • Can a self-driving car maneuver through a moral maze?
  • State Farm has plans to use biometrics to price auto insurance.
  • Volvo says it will take the full liability if one of its self-driving cars crashes.
  • Hands-free technology not keeping drivers hands-free.