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 | | From: | Edmund Fitzgerald | | Subject: | Insurance no bargain | | Date: | Thu, 20 Jan 2005 07:23:08 -0500 |
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 | From:
http://www.canoe.ca/NewsStand/TorontoSun/Money/2005/01/19/903224-sun.html
Wed, January 19, 2005
Insurance no bargain
A 10% ROLLBACK IN RATES MAY SOUND GOOD, BUT IT DOESN'T HAVE LINDA
LEATHERDALE CHEERING
By LINDA LEATHERDALE, BUSINESS EDITOR
EXCUSE ME for not uncorking the champagne bottle. But after record-profit
insurance firms robbed Ontario motorists blind with skyrocketing premiums, a
so-called 10.6% rollback seems little to celebrate.
Still, Ontario Finance Minister Greg Sorbara is over the moon.
"We have achieved our commitment of a 10% rollback," cooed Sorbara yesterday
as the Financial Services Commission of Ontario posted insurance rate
changes on its Web site (fsco.gov.on.ca).
They show an average premium rollback of 10.6% for 2004, with a 6.08% drop
in the fourth quarter -- following a 14.09% hike in the fourth quarter of
2003 and a 15.76% hike in 2002.
Industry cheerleader Mark Yakabuski was quick to spin the numbers, claiming
motorists will save a whopping $900 million in auto insurance premiums this
year, with premiums for private passenger vehicles down 12% since November
2003.
Average premiums, he said, fell from $1,499 to $1,319.
"These savings are unprecedented," said Yakabuski, vice-president of federal
affairs and Ontario for the Insurance Bureau of Canada.
Let's be real. "Unprecedented" were outrageous premium hikes while the
industry cried growing fraud was putting it on the brink of insolvency. So
while they now report record Canadian profits of $2.7 billion for first nine
months of 2004 -- up from $2.2 billion for all of 2003 -- motorists are
paying more and getting less. Collision and comprehensive deductibles, for
example, have jumped while benefits have been scaled back. The Liberals also
plan on getting rid of DACs (Designated Assessment Centres), which they
argue are an expensive bureaucracy. Critics argue this will take away
victims' rights to unbiased assessments for accident benefits.
Meanwhile, complaints swirl that it's one thing to post the new insurance
numbers and it's another thing to actually get a reduced rate.
Don Bundock says he's seeking legal advice for a class-action suit after his
20-year-old daughter, Jennifer, was bumped from the regular market into the
high-risk facility association category, which saw her insurance bill
skyrocket from just over $3,000 a year to $6,600.
That's despite a lily-white record since she started driving at age 16.
Jennifer, who drives a 2004 Ford Focus, also has no NSF payments, no
tickets, not even a change of address.
"Based on published rates for my daughter's profile, Jennifer should be
paying $2,600 to $2,700," says Bundock. "But the reality is nobody wants to
write her business."
She's not alone. Skye Graham complains after paying premiums for 30 years,
she made two small claims and was dropped by her insurer. She says she was
forced into the facility association after the regular market refused to
touch her.
Ian Almond complains that after commuting from Cambridge to Toronto every
day, he retired to Port Burwell and notified his insurance firm his annual
mileage would drop by 75% from 35,000 km to 10,000 km a year. The area where
he is is also less congested. Instead of dropping, his insurance jumped $89.
After complaining, his rate was cut $22, but his wife's still went up. They
have clean driving records.
The list of complaints clog my e-mail.
Still Sorbara says most people in Ontario have already seen a downward trend
in insurance premiums and vowed "We're going to continue with the same
determination for even lower rates."
As for complaints of being forced into facility association, Sorbara says
the number of drivers in this category has fallen to 84,405 after hitting a
high of 222,773 in November 2003. Queen's Park hiked facility association
rates by 28.9% in March 2004, 27.2% in October 2003, and 15.5% in July 2003.
A study by Lee Romanov, president of the Consumers Guide to Insurance, shows
the spread between the lowest rate and highest rate for the exact same
driver's profile has jumped by 250% from $1,300 in 1995 to $3,300 in 2005.
"That means the insurance companies are targeting who they want to insure,
and if you don't meet their profile, you can pay hundreds or thousands
more," said Romanov.
Her Web site, insurancehotline.com, compares rates.
Sorbara said Queen's Park will launch a Web site to help consumers shop
around, and may also appoint an insurance advocate "to make sure the system
is working properly."
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