What's Driving Up Ontario Auto Insurance Rates?

Since becoming Premier, Kathleen Wynne focus on the auto insurance file has been to bring down rates. The government originally set a rate reduction target of 15%. After several years, the target was quietly abandoned. The government has done a lot of tinkering with the system without providing much rate relief to Ontario drivers.

During the past four years, the government has slashed mandatory coverage, transferred responsibility for disputes to the Licensing Appeal Tribunal and introduced further restriction on accessing the courts.

Major Ontario Coverages

Much of the reforms has focused on accident benefits coverage. However, accident benefits are only one of three major coverages. The others are third party liability and physical damages.

Industry data shows that physical damage claims are driving up the cost of auto insurance in Ontario. However, the government's focus has been largely on accident benefits.

  

The chart below shows that between 2012 and 2016, claim costs rose 28.1%. While accident benefit costs rose 27.1% during that period, collision claims costs rose 49.9% and direct compensation claims costs 56.8%.

CHART 1 – PERCENTAGE INCREASE IN CLAIMS COSTS

	Increase 2012-16
Total claim expenses	28.1%
Total AB expenses	27.1%
Bodily injury claim expenses	3.0%
DC claim expenses	56.8%
Collision claim expenses	49.9%
Comprehensive claim expenses	19.6%

Why Are Physical Damage Claims Costs Going Up

A number of large insurers have recently announced that they plan to file for auto insurance rate increases in Ontario including Intact, Aviva and RSA Canada.

Intact indicates that new technologies and more expensive car parts have increased the cost to repair cars. Aviva blames escalating repair costs, distracted driving and fraud for rising claim costs. RSA Canada also blames the cost of auto repairs.

Distracted driving is causing an increase in the number of auto accident after years of falling accident frequency rates. Increased frequency rates also put upward pressure on third party liability and accident benefit costs. This explains why the reforms undertaken in Ontario over the past few years has had little impact on premiums.

The recently announced Ontario auto insurance action plan is not likely to significantly reduce rising auto insurance claims costs.

Possible Action

·         The government and industry need to direct more resources to preventing and prosecuting fraud.

·         A recent Aviva investigation reveals fraudulent activity continues to exist in the towing and repair of damaged vehicles. More comprehensive regulation of the towing and auto repair sectors is needed.

·         To address distracted driving, the penalties need to be as severe as those for drunk driving. The government could introduce administrative penalties for distracted driving. Introduce a requirement that would see cellular telephones blocked while a car is in motion.

New Medicare cards are coming starting in April

The Centers for Medicare & Medicaid Services (CMS) will start mailing redesigned Medicare cards to beneficiaries in Washington state after June 2018. The new card contains a unique, randomly assigned number that replaces consumers' Social Security numbers. The purpose is to prevent fraud, combat identity theft and safeguard taxpayer dollars. All replacement cards should be delivered nationwide by April 2019.

Here are 10 things to know about your new Medicare card:

1. Mailing takes time: Your card may arrive at a different time than your friend’s or neighbor’s.
2. Destroy your old Medicare card: Once you get your new Medicare card, destroy your old Medicare card and start using your new card right away.
3. Guard your card: Only give your new Medicare number to doctors, pharmacists, other health care providers, your insurers, or people you trust to work with Medicare on your behalf.
4. Your Medicare number is unique: Your card has a new number instead of your Social Security Number. This new number is unique to you.
5. Your new card is paper: Paper cards are easier for many providers to use and copy, and they save taxpayers a lot of money. Plus, you can print your own replacement card if you need one!
6. Keep your new card with you: Carry your new card and show it to your health care providers when you need care.
7. Your doctor knows it’s coming: Doctors, other health care facilities and providers will ask for your new Medicare card when you need care.
8. You can find your number: If you forget your new card, you, your doctor or other health care provider may be able to look up your Medicare number online.
9. Keep your Medicare Advantage card: If you’re in a Medicare Advantage plan (like an HMO or PPO), your Medicare Advantage plan ID card is your main card for Medicare – you should still keep and use it whenever you need care. However, your medical provider may also ask you to show your new Medicare card, so you should carry it too.
10. Help is available: If you don’t get your new Medicare card by April 2019, call 1-800-MEDICARE (1-800-633-4227). TTY users can call 1-877-486-2048. You can also find help in Washington state from SHIBA advisors in your area by calling 1-800-562-6900 or online. 

Information for TRICARE members in Washington state

Our office regulates insurance, but not every kind of insurance. One of the types of insurance we don’t regulate are military health plans, such as TRICARE, which is regulated by the U.S. Department of Defense. However, we occasionally receive complaints, calls, and email inquiries from military members and retirees about those plans.

On Jan. 1, TRICARE’s contracted insurance provider changed from UnitedHealthcare Military & Veterans to Health Net Federal Services. We have heard from some consumers and the TRICARE West Region that their call center is experiencing higher volume of calls with long wait times, enrollment backlogs, referral and authorization processing backlogs, and limited network provider directory & delivery issues.

While we are unable to assist in resolving military health plan complaints, we do have information that may help some people:

• TRICARE West customer service number: 1-844-866-9378
• Inquiries regarding West Region claims with dates of service prior to January 1, 2018 should be directed to UnitedHealthcare Military & Veterans. For all other inquiries, contact Health Net Federal Services at 1-844-866-9378 or go to its online portal.
• Consumers may file a complaint online with TRICARE.  
• For more details about the transition from UHC to Health Net Federal Services, see the FAQ for Beneficiaries. 
• If you decide to contact your Congressional representative, be sure to include TRICARE West’s response to your inquiry. If they advise you to contact your state’s insurance commissioner, let them know that we do not regulate your insurer. 
• Find health care information for veterans from the OIC.

If you have questions about another type of insurance – auto, renter, homeowner, or another type of property, you can talk to a consumer advocate by calling 1-800-562-6900 or contact us online.