The province of Ontario has big plans to reduce car insurance costs in the near future. One of the biggest pillars of those plans is the 8% percent reduction rate on auto insurance and an approximate 15% reduction in the coming years. What many people don’t know is that the 15% reduction rate was a condition made by the NDP when there was an agreement to support the Ontario budget earlier in 2013.

One of the NDP supporters by the name of Gilles Bisson has been quoted speaking out about the billions of auto insurance companies being profiled by unfair legislations that seek to reduce the payouts for people who have been reportedly injured in car accidents. He then goes on to say many of the payouts have failed to be passed on to the customers that were injured which is completely shocking. He says, “That’s why in the budget we said we need 15%. We need it now — it has to be done this year.”

Furthermore, it has been reported that an increasing number of drivers have been rallying at the motion that their auto insurance expenses have become too high to pay–sometimes nearly impossible to reach. This stems from a massive increase in rates over the past few years. It has gotten so bad that it even affects drivers who have been accident-free for nearly 25 years and more. According to the NDP’s supporting groups, this was the deal breaker and the incident that sparked a call to action to reverse this injustice.


Many arguments have been going on behind the scenes with people like Randy Carroll commenting on such matters. He states that the government of Ontario has to first handle the increasing problem of auto insurance fraud in Ontario, which has been on the rise. It goes without saying that fraud causes the auto insurance industry approximately $1.5 billion, annually, Mr Carroll says. Following the problem of auto insurance fraud, he follows up by citing an increase in fraudulent medical clinics getting involved in insurance scams. Moreover, tow truck drivers working often work hand-in-hand with auto repair shops in schemes to increase customers repair bills. As one can see, there are many factors that play into this situation’s solution and problem. On that note, auto insurance rates are mainly based on the driver’s history, the driver’s location, the driver’s record, and other factors pertaining to the driver and vehicle.

The job of the Ontario’s Superintendent of Financial Services is to review auto insurance rates proposed by all auto insurance companies while the Financial Services Commission of Ontario is designed to closely monitor the auto insurance rates of experienced, good standing Canadian drivers to ensure no fraudulent activities interfere with their safety.

2016 Update

While the car insurance savings target was increased to 15 percent by September 2015, the province has only reached the 10 percent mark by January 2016. Premier Wynne admitted at the time that her government knew at the outset that the goal was ambitious and that they did not fully expect to meet the mark on schedule. Understandably, the opposition parties had some harsh words for that tactic, claiming that the premier misled provincial parliament and Ontario voters.

Further stages of the legislation are taking effect in June 2016. These changes apply to the way accident benefits are assessed and paid out. Previously separate amounts have been combined in a way that reduces what insurers are obligated to pay out in claims, though it attempts to do this in a way that eliminates redundancy and minimizes loss of benefits to car accident injury sufferers. Catastrophic injuries are also redefined to bring current medical definitions into play. This may reduce some injuries previously classed as permanent disabilities.

There is no word on how much these changes are expected to reduce premiums and in fact it is likely that measurables will not be available for some time as the effects of the new legislation need to trickle down before further insurance cost savings are seen.

Car insurance fraud continues to be a concern in Ontario. Thought to be focused in the north and western GTA, crime networks are staging car accidents and involving complicit tow truck operators, body shops and medical clinics. The insurance industry is working with police departments in the GTA to share investigatory knowledge, hoping that police on the scene of an accident may be able to note red flags of fraudulent activity at the outset. Car insurance fraud is thought to account for billions of dollars in excess settlements, costs that are borne by all Ontario drivers.