BY JUSTIN FORD
Bill 15 – aimed at lowering auto insurance rates – was passed by the Ontario legislature on Nov. 20, 2014. The bill aims to lower auto insurance by an average of 15 per cent by August 2015.
“We want to make sure people with clean records get the benefit of the cost reductions that are going to be imposed now by this piece of legislation,” said Finance Minister Charles Sousa at a Queen’s Park press conference.
Though the bill has just passed, insurance companies have been taking action to meet the 15 per cent decrease over the last year. By August 2014, the goal was to have auto insurance in Ontario drop by eight per cent, then the other seven per cent by August 2015. However, the current average decrease across Ontario is only 5.4 per cent.
“They (insurance companies) were allowed to increase their rates based on their financial data,” said Kitchener’s Advocate Insurance Group sales representative Scott Heaman. “Some companies didn’t even have to follow it (the decrease).”
This bill sounds like a definite win for people who pay auto insurance, but only in certain areas of Ontario.
“The decrease is an average,” Heaman said. “They (insurance companies) can (potentially) increase Toronto’s rates by five per cent, and drop Ottawa’s by 20 per cent.”
Even though this bill sounds like wonderful news for all who own a vehicle, it really isn’t. In some cases, some Ontarians might even pay more when everything is said and done. Companies that lower their car insurance rates substantially will also be looking to make up for that loss elsewhere.
“They will be taking a hit financially and they will be attempting to reallocate it to home and commercial insurance,” Heaman said. “In the end, companies will try to make it up and tighten their guidelines on home insurance because it’s not regulated by the government.”
So with the insurance companies trying to make up for their losses, homeowners may want to keep a watchful eye on their premiums.
“I’m not worried very much, unless the profit margins on house insurance are much larger than that on car insurance,” said multiple home and property owner Devon Sampson, a Woodstock resident.
“It would be counterproductive for an insurance company to raise their rates too much.”