It’s nearly a year past the point when Ontario’s Liberal government promised a 15-per-cent cut to auto insurance rates — and premiums are on the rise again.
The Financial Services Commission of Ontario published its approved rates for the second quarter of 2016 on Friday, and the premiums increased on average by 0.33 per cent. This followed a decrease of just over 3 per cent in Q1.
During the Liberal government’s minority days, in 2013, the NDP squeezed a vow out of Premier Kathleen Wynne to reduce auto insurance rates by an average of 15 per cent by August 2015. But since then, rates have only fallen by an average of about 10 per cent, including Friday's numbers.
The Liberal government has introduced reforms to curb fraud and reduce auto insurance rates by way of changes to dispute resolution over benefits and tow truck rules.
Prior to a Monday cabinet meeting at Queen’s Park, Finance Minister Charles Sousa said auto insurance rates are still trending downwards. Friday's approved rates involved 14 insurers that make up about 30 per cent of the market in Ontario.
“But again, it’s not a point in time that I’m so concerned about, it’s over a long period of time that we have a better system in place that enables us to have lower costs,” Sousa told a reporter. “And the system is still working those things through.”
And, as of June 1, changes to auto insurance benefits came into effect and coverages were reduced to make premiums more affordable, FSCO said.
The changes, which would only kick in if a policy were renewed or purchased, included lumping benefits together to provide less and the option to purchase additional coverage. But there was also a cut to the monthly interest rate on premium payments, from 3 per cent to 1.3 per cent on one-year policies.
Wynne admitted earlier this year that the government’s 15-per-cent pledge to cut premiums was a “stretch goal.”
“We always knew it was going to be a challenge,” she said in January.
NDP Finance Critic Catherine Fife noted in a release that some of the auto insurance rates had gone up by as much as 3.7 per cent. Another insurer posted a 6.83 per cent decrease, but held a zero-per-cent share of the market.
"People deserve so much better than broken promises and ‘stretch goals,’" said Fife. "They deserve a government that will provide real opportunity for every Ontarian.”
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