Ontario now faces a crisis involving an “unprecedented” number of motor accident victims whose insurers are not providing the necessary assistance required of them, argues FAIR Association of Victims for Accident Insurance Reform, a victims advocacy group committed to industry reform.
Statistics Canada reported that 61,063 civil cases await hearings in the province’s Superior Court, and FAIR contends that many of the injured parties lack access to treatment and rehabilitation as they wait a decade or longer for auto carriers to handle their claims.
The organization believes that insurance companies withhold benefits in order to maximize profit.
“A big concern is that Ontario insurers are investing the funds that are owed to victims and using the funds as equity to invest while the claimant waits years before they can get to court to hold their insurer accountable,” Rhona DesRoches, FAIR Board Chair, told
Insurance Business Canada.
She believes that this financial incentive comes at a severe detriment to Ontario policyholders. The Auditor General’s 2011 Report found that auto insurance companies turn down about half of all claims.
“The new reduced pre-judgement interest rate of 1.3% interest payable to victims by insurers who have withheld benefits would be an incentive to deny even more claims going forward,” DesRoches said. “If an insurer is guaranteed a return of 11% and will only ever have to pay a penalty of 1.3% for using the funds owed to victims it will be a money making machine for insurers.”
FAIR is urging the Auditor General to conduct an investigation into these corrupt practices, since taxpayers help to subsidize the costs of civil court lawsuits, as well as victims’ financial and medical support when car crash sufferers need to rely on public sector safety nets.
The advocacy group also argues that IBC’s mandate to control costs through increased scrutiny on personal injury lawyers is a misguided attempt to shift focus away from underlying injustices.
“The IBC has successfully lobbied our legislators to have caregiver and treatment provider costs capped and this has resulted in many good therapists leaving the auto insurance field for greener pastures with less hassles,” DesRoches said. “The same thing will happen if this bid to control legal fees is successful. So who will benefit when the best of lawyers leave auto insurance and personal injury? Ontario's insurers will profit and certainly not victims who struggle with this complex system.”
In addition to calling upon the Auditor General to conduct an industry review, FAIR suggests the following:
- Auto insurance companies should employ the Internet and digital tools in their delivery systems to reduce operating costs and free up hundreds of millions of dollars for MVA victims
- Amend the Insurance Act to be more accessible and easily understood by consumers who may not be able to retain an attorney to interpret regulations for them
- Instead of the FSCO overseeing an open and transparent consumer fee schedule, have the Law Society or an independent board address such concerns
Still, DesRoches holds out hope that increased pressure from the public, elected MPPs, and the Auditor General will encourage auto insurance companies to be more compliant with policyholders.
“We pay our premiums and we should be able to access the coverage we paid so handsomely for,” DesRoches said.
