This summer, auto insurance rates might decrease – but many people could see their coverage reduced.
Starting Monday, Ontario is adjusting what is deemed mandatory under accident benefits – the coverage that’s included in standard insurance plans. This change will allow drivers more flexibility regarding their costs, but some experts warn it may leave many drivers at risk and might not significantly lower overall premiums.
Lance Miller, an insurance broker and CEO of Surex Insurance, notes that the average consumer could save $100-200 each year by choosing the most basic coverage, but he cautions that these lower premiums might not be worth it if something goes wrong.
“If you opt out of funeral expenses, maybe that is going to be a $30-50 charge annually,” said Miller. “But if there’s a funeral, those cost tens of thousands of dollars.”
This change follows a 2022 report from the province’s auditor general, which revealed that Ontarians were facing the highest auto insurance rates in Canada.
Consequently, Doug Ford’s 2022 election campaign included a promise for changes aimed at giving consumers more options when buying auto insurance over time.
Previously covered items like income replacement, lost educational expenses, death benefits, and funeral costs will become optional starting July. The revised mandatory benefits will now only cover medical care, rehabilitation, and attendant care benefits.
Miller stated this puts the responsibility on consumers and their brokers to grasp which optional benefits they are letting go of. “I think it’s going to require a shift in the consumer’s mind to not be focused directly on what’s the cheapest auto insurance,” he said.
“It’s going to be: ‘What really covers me and how do I find what I really need to cover myself at the best price?'”
If you already have an auto-insurance policy, your coverage remains unchanged – the changes coming on July 1 will only affect new or updated policies. The province has instructed brokers to reach out to clients and offer them options for adjusting their policies.
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‘Not Ideal For Lowering Prices’: Expert Opinion
Daniel Ivans-a broker specializing within rates. ca-mentions this isn’t an initial attempt aimed solely towards reducing premiums effectively.
“For quite some time now Ontarians expressed desires advocating enhanced transparency paired with clearer understanding surrounding fluctuating levels regarding respective premium amounts”, he noted.
Back in 2016 when Liberal leader Kathleen Wynne presided over provincial governance limits on specific types concerning maximum benefit amounts underwent reductions intending provision for lowered premium options accessible unto drivers seeking affordable solutions
Yet according Ivans despite past alterations having been initiated pricing mechanisms continue surging higher than ever before.”Over recent decades vehicle thefts compounded alongside climate shifts caused inevitable spikes within auto insurances” remarked him succinctly
He advises clients realizing dropping optional protections may yield short-term savings but alternatives exist paving ways avoiding elevated risks ahead further down roads
“It’s indeed our freedom engaging selectively; however traditionally decreasing coverage rarely serves advantageous ends aiming chiefly towards cost reductions”, voiced his thoughts candidly
Suggestively shopping around amongst varied insurers often proves beneficial yielding preferable rates opposed simply slashing current existing coverages” concluded succinctly.
Changes Affect Non-drivers Too
Dave Shellnut, known as The Biking Lawyer, points out potential risks for uninsured accident victims due to these changes. “Before July 1st, if you’re involved in a motor vehicle collision, no matter who you are-pedestrian, passenger, driver or e-biker-you’re entitled to receive the same no-fault benefits,” he said. Now only drivers along with their spouses and dependents will qualify for any optional benefits plan. If someone borrows a car from a driver who has optional coverage but isn’t listed on that policy themselves-they’ll only receive minimum mandated benefits outlined by the province-not additional coverage purchased by that driver. Injured individuals won’t have access to newly optional benefits associated with a driver’s policy unless specifically mentioned otherwise. If non-drivers carry their own auto-insurance or private workplace benefit plans-they’ll apply in such cases. However, Shellnut worries about many pedestrians and cyclists across Ontario without any form of coverage. “Many people don’t drive in major cities across Ontario and we don’t have family members that do either,” he said. “The implications of this versus minimal savings for taxpayers are truly concerning,” he added. WATCH | More Toronto drivers are speeding after camera removals: More Toronto drivers are speeding after camera removals according to city reportToronto has experienced a notable rise in speeding incidents since cameras were taken down last year under Ford’s government initiatives. CBC’s Naama Weingarten analyzes those figures along with public reactions.In an email statement from Sarah Chapin representing Ontario Ministry of Finance emphasized that pedestrians as well as cyclists still have access to essential medical care including rehabilitation plus attendant care benefits should they get into an accident.
“Our government aims at providing greater convenience while allowing drivers better choices when purchasing automobile insurance ensuring they select suitable policies catering specifically towards meeting individual needs,” she explained.
