Ontario’s auto insurance rates have increased in the first three months of the year, reflecting the province’s continued struggle in balancing its insurance issues.
The Financial Services Commission of Ontario has this week approved an average rate increase of 1.24%.
Ontario’s Liberal government promised back in 2013 that it would enact a 15% average cut. The proposed cut, however, never materialized. Premier Kathleen Wynne later announced that the pledge to reduce auto insurance rates was a “stretch goal.”
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The Canadian Press noted that the recently approved rates put the average cut since 2013 at a little over 7%.
News of Ontario’s failure to meet its auto insurance rate target follows a recently-released study that painted a bleak picture of the province’s auto insurance industry.
David Marshall’s report found that although Ontario had among the lowest levels of accidents and fatalities in the country, the province also has the most expensive auto insurance premiums.
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According to the report, the average auto insurance premium in Ontario is $1,458 – nearly 55% higher than the national average of $930. Marshall wrote that if the province managed to lower its average to match the national average, it would save its drivers almost 40%, or about $4 billion a year.
Marshall suggested that Ontario’s current system favors cash settlements instead of providing proper care, hence the high premiums.
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Revealed: Ontario government’s auto insurance report
