The more than 11 million drivers in Ontario could soon see insurance savings courtesy of Tuesday’s provincial budget. In its budget announcement, the Progressive Conservative government announced it would allow individual Ontarians more choice over what they pay for in auto insurance.
“We’re moving forward with auto-insurance reforms that would provide more choice and flexibility to drivers in order to keep their premiums more affordable,” Finance Minister Peter Bethlenfalvy said during his speech introducing the budget.
The changes, which will be introduced as part of the government’s budget bill, known as the Building a Better Ontario Act, will make optional some currently mandatory aspects of accident coverage. These include long-term disability coverage measures such as income replacement and home maintenance. Drivers who already receive coverage through workplace insurance, for example, will be able to opt out of those portions of their auto-insurance plan — as will drivers who do not have coverage elsewhere.
In 2022, the most recent year for which even preliminary comprehensive data is available, there were 25,165 car, truck, and motorcycle collisions that either killed or seriously injured at least one person in Ontario. In total, 592 people died on Ontario roads and almost 34,000 were injured.
Auto-insurance documents are difficult for the layperson to interpret, as Associate Minister of Small Business Nina Tangri, a veteran of the insurance industry, acknowledged in the house in 2019. “It is a very difficult policy to understand,” she said.
Changes to mandatory coverage will be implemented “in a way to help ensure that drivers are able to make informed decisions when choosing insurance coverage options available to them,” the budget states.
The government will be rolling out education in collaboration with the Financial Services Regulatory Authority of Ontario, which oversees the province’s auto-insurance industry.
The opposition parties say it’s not immediately clear how the government plans to make sure that consumers are fully educated on what they may be giving up in order to get insurance savings. “This is going to force Ontarians who are looking for more affordable options to take on additional risk that they shouldn’t be forced to take on,” said NDP leader Marit Stiles.
Her concerns were echoed by Green leader Mike Schreiner: “When you start reducing levels of coverage, that can create issues [for people] further down the line.”
The budget also highlights that the FSRA is assessing methods of pricing insurance based on geography — why auto insurance costs more in Brampton than it does in Aurora. At the beginning of March, the regulator said it would not be getting rid of so-called territory ratings entirely.
“We need to have a strategy in place so that rates can be a little more stable and affordable right across the province,” said Liberal leader Bonnie Crombie.
Additionally, the budget proposes changes to simplify which party pays for medical and rehab expenses after someone is hurt in a car crash. Auto insurance will be required to pay to the limits of a policy before other policies, such as health insurance through a workplace, kick in.
This isn’t the first time this government (or its predecessors) has tried to address Ontario’s notoriously pricey auto-insurance sector. Prior to rolling out the new policies, the province made no projections about what impact the auto-insurance reforms might have on the average cost of insurance. “I don’t think that we have any specific numbers in mind,” Bethlenfalvy said at Queen’s Park on Tuesday.
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