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Insurance Company Advisory for Customers


The insurance industry and the Ontario government have been working to ensure that car insurance in Ontario is fair and affordable. Beginning in 1996, the Automobile Insurance Rate Stability Act was passed. Following its introduction, average insurance premiums declined by over 12%, meaning significant cost savings for many consumers. But lately, rates have increased substantially as claims costs have been rising.

To help control costs and stabilize rates, the Ontario government is implementing a two-step reform package:

ü       Step One, effective October 1, 2003, deals with fairness and immediate cost pressures. Reforms to coverage are designed to ensure that injured people receive the care they need while reducing red tape, fraud and abuse. These changes will;

· Streamline access to treatment for common injuries such as whiplash by introducing a pre-approved framework for treatment;
· Improve access to benefits for children and others suffering serious injuries;
· Prohibit unfair business practices by health care providers and paralegals effective November 1, 2003;
· Introduce a code of conduct for paralegals working in the auto insurance system effective November 1, 2003;
· Introduce rules about the kinds of injuries that are entitled to compensation for pain and suffering, and about what kind of evidence is required to get such compensation. These rules apply to accidents that occur on or after October 1, 2003.
· Prohibit insurers from changing the risk rating of consumers because of not-at-fault accidents or an inadvertent NSF cheque;
· Change your policy so that if your car is stolen and not found, your insurance company will now subtract the deductible*. This change will take effect when your policy is renewed and will apply to all new policies issued on or after October 1, 2003.
· Change the deductibles that apply to pain and suffering claims from $15,000 to $30,000 (and from $7,500 to $15,000 for dependants’ claims). These changes are effective for accidents that occur on or after October 1, 2003.
· Clarify your policy so that if your car is a total loss (or write off), and you have coverage with a deductible, your insurance company will subtract the deductible*. This is a clarification and it will take effect October 1, 2003.

ü      Step Two could save you more. After consultation with the public, the government plans to do more so insurance companies can lower car insurance rates for good drivers. We will keep you informed.

For more information on the plan for affordable and fair car insurance, or to discuss your policy, please contact your insurance representative.

* Remember, the Ontario auto insurance system allows you to customize your policy by choosing the level of your deductibles and additional accident benefits that suit you best.

This information is provided by the Financial Services Commission of Ontario (FSCO). For further information, please visit the FSCO web site at

Author: car health