Insurance News – Wednesday, March 9, 2016

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Wednesday, March 9, 2016:

  • It was inevitable that a Google self-driving car would cause an at-fault accident.  A Google car got into a minor fender-bender struck a bus on a city street and Google admits fault.
  • Fleets of coordinated, self-driving cars could bring an end to parking as we know it and help make our urban future cheaper, greener and much more pleasant.
  • With driverless cars soon to be a reality, should humans be allowed to drive?
  • Mississauga city councillors vote to halt Uber services while they debate a solution.
  • This is an interesting article on how self-driving cars may be following similar path as elevators.

Insurance News – Wednesday, July 16, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Wednesday, July 16, 2014:

  • Ontario Liberals have re-introduced and combined Bills 171 and 189 as Bill 15.  The legislation contains some of the controversial changes introduced in Bill 171 including a reduction in prejudgment interest and restrictions on the ability to resolve SABS disputes in court.
  • FSCO has released the second quarter 2014 rate approvals.  Only five  rate filings were approved representing only 14.5% of the market.  The filings reflect an average increase of 0.22% when applied across the total market. Although this represent a small portion of the market, it seems to suggest that the government’s rate reduction strategy is stalled.
  • A U.S. company will soon begin selling a kit that lets you turn your existing car into a self-driving vehicle. The system is being billed as the world’s first “highway autopilot” and will cost about $10,000.

Insurance News – Wednesday, July 23, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Wednesday, July 23, 2014:

  • Car crash scams are becoming increasingly sophisticated with the latest wrinkle involving organized groups gaining access to medical clinics to cash in on lucrative payouts for phony insurance treatments.
  • Auto insurance fraud is more frequent and sophisticated, with organized groups replacing individual fraudsters.
  • Ontario’s efforts to reform the insurance sector and clamp down on fraud in the Toronto area have not slowed the problem of staged car accidents.
  • There seems to be a debate going on as to whether self-driving cars will mean less traffic or in fact more congestion.
  • Google may be ready to launch self-drivering cars in the near future but they may be more than 10 years away because we’re just ready for them.

Insurance News – Wednesday, December 2, 2015

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Wednesday, December 2, 2015:

  • There is a substantive risk associated with relying on insurer examination reports to deny serious claims which can be compounded by taking a matter to arbitration without having sufficient evidence to support a position.
  • Why auto insurance rates are so high in the Greater Toronto Area.
  • There is a down side to low gas prices – more vehicle traffic and more accidents.
  • LAT releases update on transfer of auto insurance disputes from FSCO. LAT still planning on accepting disputes beginning April 1st.
  • Consumers big winners in new law regulating towing operators.
  • Ontario’s auto insurance overhaul needs to put consumers first according to a former New Jersey regulator.

Rate Evasion Is The Latest Type of Fraud To Hit The GTA

Registering and insuring your vehicle using your parent’s address in a neighbouring city might seem like a clever way to save money on your auto insurance rates.

Doing so can save hundreds of dollars.  Using an online quoting system, I found that a 30 year old man, driving a 10 year old Toyota with no tickets or accidents would pay $1,998 if he lived in North York. Change the address to one in Barrie and the rate drops to $1,489. That’s a $500 difference.

While fibbing on an address may seem harmless enough, it’s a practice known as rate evasion, and it’s considered a form of insurance fraud.

With rate evasion, people claim to live in another city or that their car is garaged there, in order to pay lower insurance rates.  If you say you live in Barrie but actually live in Toronto, you’re posing a risk in Toronto but you’re not paying for that risk. Toronto residents whose vehicles are registered in the right location end up covering some of your share of the costs by paying higher auto insurance rates.

Rate evasion occurs in regions with high auto insurance rates.  It’s difficult to detect in the GTA since vehicle plates do not reveal where your car is registered.  In some urban areas in the U.S. it is a little more obvious.  In certain areas of New Jersey, especially northern, urban areas, and the southern part of the state bordering Pennsylvania, it’s not uncommon to see plenty of cars with out-of-state license plates regularly parked in people’s driveways and on residential streets.  Recently I was involved in a minor collision and the other driver provided me with his driver’s licence, vehicle registration and insurance card.  Each document had a different address.  It made me just a little suspicious.

Auto insurance is a pooling system where everyone pays premiums and the pool of funds are used by an insurer to pay claims to those who have accidents.  Everyone is rated based on their risk profile which includes where you live.  To certain extent there is always going to be some form of cross-subsidization based on the rules an insurer follows.  For example, an insurer cannot determine premiums based on whether the policyholder has access to collateral benefits from a workplace (e.g., supplementary health benefits). Those with access to collateral benefits are going to claim less than those without yet they may be rated the same, all things being equal.

When consumers try to beat the system by registering their vehicle at a false address, they are being cross-subsidized by other policyholders.  The difference is they are operating outside of the rules and the law. Therefore, it’s fraud.  Still, high premiums in the GTA will continue to tempt some drivers.

HCAI Data: Over 70% of MVA Injuries Continue to be Strains and Sprains

The IBC has now published the standard HCAI reports for the first half of 2014. The document provides over 75 pages of aggregate data collected by HCAI going back to 2011. HCAI was made mandatory on February 1, 2011.

The standard reports are published on an “accident half year” basis. In accident half year statistics, the experience of all claims with accident dates in the same accident half year is grouped together. The accident half years are defined as calendar half years, with January to June being the first half and July to December being the second half for each of the stated years.

The chart below breaks down the percentage of claimants receiving treatment per injury group. The data is further broken down by accident half year and the percentages are based on claims transactions between the accident date and June 30, 2014.

The injury group sizes have remained consistent since the HCAI began collecting data.  The data suggests that there doesn’t appear to be any obvious erosion of the minor injury definition.  At least 70% of claimants receiving treatment are being diagnosed under strains and sprains which fall under the minor injury definition.  The diagnosis does change over time when you look at previous periods in a chart I posted earlier this year. There has been some drifting from strains and sprains to WAD III (PN) and third degree tears (FD).  For example, for the first half of 2013, the SS injury group dropped 2.2% between the two reports while the PN and FD groups increased by 1.0% and 0.8%.  This may reflect disputed claims and the time it takes to resolve disputes.

Insurance News – Thursday, September 15, 2016

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Thursday, September 15, 2016:

  • Uber and Lyft have each been in the news recently for their investments in and work with automaker partners in developing self-driving technology. So, what about the drivers?
  • Michigan may soon become the first state to allow self-driving cars on the road without a human driver sitting behind the steering wheel.
  • The Ontario Provincial Police recently suggested that so far this year, it has investigated 38 road deaths in which a distracted driver was involved.
  • What Amazon can teach auto insurance carriers about online retailing and enhancing the consumer experience.
  • Vastly different story lines among Canada’s four public auto insurers.
  • Self-driving Google cars will soon know when the police are approaching and to pull over to the side of the road.

Insurance News – Thursday, October 2, 2014

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

  • Death, drones and driverless cars: how Google wants to control our lives.
  • Here’s how technology is being used to fight insurance fraud.
  • Google is Uber’s biggest investor. See where this is headed.
  • New Minimum Capital Test Guidelines for P&C insurers coming in 2015.
  • FSCO has received service provider licensing applications from 2,712 healthcare facilities. FSCO also maintains a public registry of licensed service providers.
  • OSFI warns of lower underwriting profits if Ontario auto insurance  rates are reduced by 15%.

Benefit Cuts Lead To Modest Rate Reductions

FSCO’s latest quarterly rate approval numbers have been released and suggest that some savings have been accrued from the statutory accident benefit cuts that become effective on June 1.

FSCO approved 50 private passenger automobile insurance rate filings during the first quarter of 2016. All 50 filings were automobile insurance reform filings. These 50 insurers represent 83.36% of the market based on premium volume. Approved rates decreased on average by 3.07% when applied across the total market.  This is the largest drop in rates since the fourth quarter of 2013 when approved rates decreased on average by 3.98% when applied across the total market.

Although the government has begun to distance itself from the 15% rate reduction promise made in August 2016 (likely an admission that it can’t be achieved), most people are, at least, curious how close the latest round of cuts got us to 15%.  If you aggregate all the rate changes since the 2013 announcement, the total rate reduction is 10.17% when applied across then total market.  There may be further reductions in the next quarter but it’s safe to say that this is about it.