Essential Tips for Consumers renewing their Car/Auto Insurance in Ontario.

After September 1, 2010, car insurance companies and brokers across Ontario will be presenting consumers with new choices for their auto insurance renewals.  A daunting process is ahead.  The insurance system in Ontario is one of the most complicated systems in North America. 

Even though car insurance is a major budgetary item for many families, many consumers are unfamiliar with the coverage they actually have.  After September 1, consumers will be given a number of choices as to amount of benefits they wish to purchase. By giving such a choice, the intent was to give them a break on premiums being paid.  

The new basic auto policy being sold contains far less benefits than what existed before September 1.  With benefits being drastically reduced, one would of course expect to see some significant reductions in how much one has to pay in premiums. 

Therefore it is absolutely critical that each consumer ask their insurance company and brokers what are they buying and at what price.  Like shopping in a supermarket, each item ought to have a price tag.

Each consumer upon renewal will need to ask their insurer the following:

      Q.     I understand my Medical and  Rehabilitation Benefits are being reduced from $100,000 to $50,000 (and in certain cases down to 3,500).  As a result of this, how much am I saving on my premium?  If I want to keep the benefits I had before, does my premium stay the same?   If not why not? 

      Q.     I understand my Housekeeping Benefits and Caregiver Benefits are being eliminated under the new basic policy.  As a result of this, how much am I saving on   my premium?  If I want to keep the benefits I had before, does my premium stay the same?   If not why not? 

       Q.    I understand my Attendant Care Benefits are being reduced in most cases by half from $72,000 to $36,000.  As a result of this, how much am I saving on my premium?  If I want to keep the benefits I had before, does my premium stay the same?   If not why not? 

After each question, write down the amount of savings you will achieve.  As well write down any increases you have in order to keep the same amount of benefits you had before.  If it looks like you are paying the same amount for a lot less, then ask “why am I paying the same amount of premium for this new policy when I get so much less?”

Or if you want the same coverage as before ask “why do I have to pay more in premiums now in order to get the same coverage I had before”?

Or if you only see a fraction of a saving ask “why did I save only a little bit on my premium when you are decreasing my benefits in some instances by half or eliminating some benefits all together?”

Some insurance companies may justify no savings on your premiums by telling you one of the following:

A.    Fraud within the system has increased costs and therefore they have to increase premiums.

B.   You have the ability to sue the other driver for more benefits if you need them so don’t worry about the reductions?

C.   You have other benefits through your employer so you may not need all the benefits you had before.

But when faced with these reasons, you should know the following:

A. Fraud existed before and after September 1, 2010. There is nothing to suggest that their has been a dramatic increase in costs based on fraud.

B. The ability to sue the other driver for additional benefits existed before and after September 1, 2010.  It has not changed.  So why would that be a factor.

C. The benefits available through my employer existed before September 1, 2010.  If that was the case, why did I not get the savings before under the policy.

Hopefully companies will give consumers a fair shake with these changes. If you buy the water down policy, then you should get the savings.  If you want to keep what you already have, don’t jack the rates. !

If there are no savings, then ask the tough question, where is the money going?

(See Patrick Brown discussing the issue on CP24 http://www.youtube.com/watch?v=5s2Te4DlS6M)

Patrick Brown

Patrick Brown

Principal Partner

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