Despite government efforts, premiums are on the rise in Ontario
Auto insurance premiums in Ontario, Canada, continue to rise, despite promises being made by the government. In April of this year, the government had announced that insurance rates were down by 0.95% during the first quarter of the year, which is a far cry from the average 15% reduction that it had promised to achieve by next month. In Ontario, premiums continue to rise, and government action may not be enough to mitigate the issue.
Several companies seek to raise rates in order to cover costs
According to the Financial Services Commission of Ontario, 26 companies providing auto insurance coverage, representing 52% of the provincial market, have requested rate increases. These insurers have increased premiums by an average of 0.6% in the second quarter of this year after having raised rates in the first quarter as well. The Insurance Bureau of Canada noted that some insurers have requested premium increases in order to cover costs and to recover from financial losses associated with claims and, to some degree, fraud.
Government efforts to lower insurance premiums are proceeding slowly
The government may not be failing in its promise to reduce auto insurance rates, but it is falling significantly behind in its efforts to do so. On average, premiums have fallen by 6.46% since August of 2013, and recent rate increases are likely to slow progress toward achieving the government’s overall goal. Opponents of the current government have suggested that this is yet another in a long line of failings from the government structure, but recent changes in insurance regulation could add more momentum to efforts to lower auto insurance rates in the coming month.
Fraud is becoming a problem for the auto insurance sector
Auto insurance fraud is cited as one of the reasons that premiums are on the rise. Insurers have managed to keep rates relatively stable, avoiding massive increases in premiums that would place many consumers under financial strain. Fighting fraud is becoming a top priority for insurers and lawmakers alike, and new regulatory changes could aid in rooting out fraud more effectively.