Bill 45 - An Auto Insurance Amendment Act

[jay-d]

I think this is great!

Jagmeet is a good friend of mine and I think this is something everyone in Ontario should be supporting, not just the Indian community in Brampton!

https://www.facebook.com/events/244255419005722/

[VifferFun]

It's not at all surprising that Brampton MPP would be requesting the elimination of territory rating, since this would entirely be to their benefit. Brampton pays higher insurance rates because the people who live there claim MUCH more than anywhere else in Ontario. If you eliminate territory rating, then the people who live in places where claims are very low will see premium hikes in order to subsidize the high-claim territories. If high-risk territories are going to see premium decreases, then low-risk territories will see premium increases.

[jay-d]

So it's a lose-lose

I'm in Mississauga and I pay a ridiculous premium.. sigh.

[VifferFun]

So it's a lose-lose

I'm in Mississauga and I pay a ridiculous premium.. sigh.

Mississauga tends to be higher as well. Basically, if a region is paying higher-than-average insurance rates it is because they are making higher-than-average claims. I would be pretty angry as a resident of a safe driving and non-litigious region if I had to subsidize the bad driving habits and lawyer-happy characteristics of another region. As an example, the average person in Brampton claims three times as much as the average person in a low-risk region, but if MPP Jagmeet gets his way then the low-risk drivers will see some hefty increases.

Rather than offloading Brampton's problems on other regions, they should try and deal with THEIR problem themselves. The insurance companies aren't out to get Brampton residents, but just charging the premium required to cover the risk. Why are people claiming so much in Brampton? Is fraud rampant? Do Brampton residents suck at driving or perhaps have no consideration of others? I can tell you from experience that driving in a low-risk region is much different than driving in a high-risk region. I won't even ride my bike in the high-risk regions for fear of being killed by the stupidity of others.

Now, since Jagmeet represents the interests of Brampton residents, it makes perfect sense why he would want other regions to essentially give money to the residents of his region. The truth is that most MPPs who would be on the losing end of this deal are too stupid to even know that such a bill would be to the detriment of their residents and will probably not put up much of a fuss. I don't really blame him -- if I were the MPP of Brampton, I would probably try for the same thing since if the bill is passed, it is surely to win him another seat in his riding in the next provincial election

[Kedo]

It is hard to be honest and politically correct at the same time so I will leave the answer as Viffer stated since claims is his game, he knows it best.

Sorry I tried and can't do it. Brampton is higher because of all the BS claims along with people who shouldnt be driving and have questionable licences to match. If you recall there were examiners that were paid for issuing passes that were not warranted.
That is the nicest way I can say it.

[DOHC1]

I understand that high claim = higher premiums.. If I were in business I would do the same thing. However, since fraud is playing a major role in driving up rates, why should I have to pick up the tab? The onus is on the INSURANCE company to combat the fraud. If you cannot operate a business without people scamming you left right and center.. then if you can't take the heat get out the kitchen. I'm FORCED by law to purchase auto insurance, and the way its being run is a joke. Government forces me to give a private company my money, and since the company sucks and keeps getting scammed, I have to pay more than I should?
Just because I live next to a bunch of scammers doesnt give the insurance companies the right to bundle me in with them and jack my rates. Government needs to step in here and partner up with the insurance industry to combat insurance fraud. Add possible jail time and fine of $100,000 to those convicted of insurance fraud and see how quickly people like RAGU go away. Legit accidents should be rated to the AREA, however the cost of fraudulant claims should be distributed across the province, as it is a failure on the COMPANY'S part, NOT a "failure" of the area beign rated.

Insurance is a game of assesing how much risk someone is, and then creating a figure to cover said risk. Fraud works the same way. If I see the risk of getting caught+consequences are not that high, and the possible payouts are in the tens of thousands, I'm much more likely to commit fraud. Risk vs Return

Just my 2 cents..

[VifferFun]

I understand that high claim = higher premiums.. If I were in business I would do the same thing. However, since fraud is playing a major role in driving up rates, why should I have to pick up the tab? The onus is on the INSURANCE company to combat the fraud. If you cannot operate a business without people scamming you left right and center.. then if you can't take the heat get out the kitchen. I'm FORCED by law to purchase auto insurance, and the way its being run is a joke. Government forces me to give a private company my money, and since the company sucks and keeps getting scammed, I have to pay more than I should?
Just because I live next to a bunch of scammers doesnt give the insurance companies the right to bundle me in with them and jack my rates. Government needs to step in here and partner up with the insurance industry to combat insurance fraud. Add possible jail time and fine of $100,000 to those convicted of insurance fraud and see how quickly people like RAGU go away. Legit accidents should be rated to the AREA, however the cost of fraudulant claims should be distributed across the province, as it is a failure on the COMPANY'S part, NOT a "failure" of the area beign rated.

Insurance is a game of assesing how much risk someone is, and then creating a figure to cover said risk. Fraud works the same way. If I see the risk of getting caught+consequences are not that high, and the possible payouts are in the tens of thousands, I'm much more likely to commit fraud. Risk vs Money

Just my 2 cents..

Good points, but I wasn't saying that fraud was the reason for Brampton being terrible -- it's just one possibility. The biggest factor driving rate increases these days is the frequency and severity of claims. It is quite possible (and likely) that residents in Brampton attempt to sue much faster than in other regions. This isn't illegal, but it's certainly a burden to the system. In the low-risk areas (usually rural), people rarely think about taking legal action, where as it is the first thing on people's minds in many high-risk areas. For the smallest of injuries, some people will hire a lawyer and shoot for the stars and try to milk thousands from their insurance company (and hence, everyone else who contributes to the insurance pool).

I think it is also a pretty well-known fact that Brampton drivers tend to be more careless than drivers in other parts of the city.

[slowbird]

Hmmmm....interesting.

As a resident of Brampton with ZERO claims and very high insurance premiums, this bill would be nice.

On the other hand, there are alot accidents here.

The insurance companies shouldn't rate premiums on where you live, but on your driving history.

I'm planning on moving out of Brampton (even though I work in Brampton too) due to the high premiums.

[DOHC1]

I agree with Brampton being full of bad drivers, along with scarborough etc..If I live in an urban area, I budget in the higher insurance as a cost of living in the area. People milking the system is definately part of it. It just grinds my gears when the scammers jack my rates.. but not the rates of those living a few KM away. Whatever the main issue is behind the rates being unreasonably high, it needs to be addressed by the government because they are the ONLY reason I purchase insurance in the first place. Either keep a Crown corporation that offers auto insurance, or regulate it properly if you go down the route of privitization.

The insurance companies shouldn't rate premiums on where you live, but on your driving history.

They take both into consideration. Honestly that part of it makes sense to me.. A dude living out in the boonies driving his pick up truck up and down a local 2 lane highway everyday is much less risk than the same truck/driver driving with the retards in the GTA.

[VifferFun]

Your guesses are as good as mine as to the reasons why claims in Brampton are more frequent and more severe than other territories.

Driving history is a big factor in determining your premium, but so is your territory. Believe is or not, but statistically speaking your territory is actually an even better predictor of your future claims than your driving history. If I had to choose just one rating variable to best separate good risks from bad risks, territory would be it.

If the Gov't wants to eliminate territory rating, they can certainly make that decision. As an insurer, I would be indifferent since we will simply have to charge the low-risk areas more money in order to subsidize the high-risk areas. As long as no insurer can use territory as a rating variable in Ontario, then it's an equal playing field and there would be no risk of adverse selection. However, as a resident of a lower-claims area myself, I would be a little perturbed that I would be subsidizing the greed and lack of driving ability of higher-claims areas.

[jay-d]

These are all excellent points and I will bring them up at the meeting!

Now, since Jagmeet represents the interests of Brampton residents, it makes perfect sense why he would want other regions to essentially give money to the residents of his region. The truth is that most MPPs who would be on the losing end of this deal are too stupid to even know that such a bill would be to the detriment of their residents and will probably not put up much of a fuss. I don't really blame him -- if I were the MPP of Brampton, I would probably try for the same thing since if the bill is passed, it is surely to win him another seat in his riding in the next provincial election

I've known Jagmeet for quite a few years and in all that time he's been one of the truest and honest people I've known.. I hope politics doesn't change that and it becomes all about numbers.

[conundrum]

I somewhat agree with this, however I do think things maybe should stay as they are -- When I moved from Courtice to Scarborough, my rates went through the roof, but I knew this would happen and was ready for it.

On the side of paying 1 rate, it does make some sense as why should my rates go up so dramatically when I'm the same driver, my car sits in same lot for the entire day (work), then I actually only commute 7km home now vs 40km before (so I am on the road a lot less, for a lot shorter of a time). I'd even argue my car is more secure sitting in a monitored underground parking structure (condo) vs in an open driveway when I lived back at home.

The con obviously is insurance companies would more than 'take it out' on everyone who is paying a lower rate, likely netting them more money/revenue. As I said, when I moved to Scarborough, I knew what was going to happen to my rates and could accept it -- if I was still in Courtice and got a letter in the mail saying now that Brampton (or elsewhere) is paying less I'm paying more -- that would be a MUCH different story (one is a choice I actively made, the other is one someone else is forcing me into without a choice).

[sonnythebull]

You live in an area known for poor driving and fraud. You might be the perfect driver but all the other people are out there are trying to crash into you. Insurance companies should rate not only where you live but the areas you drive thru on your daily commute.

[sonnythebull]

I somewhat agree with this, however I do think things maybe should stay as they are -- When I moved from Courtice to Scarborough, my rates went through the roof, but I knew this would happen and was ready for it.

On the side of paying 1 rate, it does make some sense as why should my rates go up so dramatically when I'm the same driver, my car sits in same lot for the entire day (work), then I actually only commute 7km home now vs 40km before (so I am on the road a lot less, for a lot shorter of a time). I'd even argue my car is more secure sitting in a monitored underground parking structure (condo) vs in an open driveway when I lived back at home.

The con obviously is insurance companies would more than 'take it out' on everyone who is paying a lower rate, likely netting them more money/revenue. As I said, when I moved to Scarborough, I knew what was going to happen to my rates and could accept it -- if I was still in Courtice and got a letter in the mail saying now that Brampton (or elsewhere) is paying less I'm paying more -- that would be a MUCH different story (one is a choice I actively made, the other is one someone else is forcing me into without a choice).

Theft of your car isn't the issue unless it's a target vehicle.. it's liability and accident benefits that are the money suckers

[Corey McNeely]

Interesting what's on the block next... A MPP tabling a bill for discrimination of over the higher taxes in Toronto than Mississauga, maybe one for the cost of a home in Sauga over Brampton.

[Stephen W.]

I don't read legalese but I think this is the contentious portion.
(1.5) Insurers are prohibited from using a geographical region in which an insured person resides as an element in classifying risks for a coverage or category of automobile insurance.

There is a lot more in this bill but I'll damned if I can figure out just what it says.
http://www.ontla.on.ca/web/bills/bil...etail_the_bill

If I understand correctly this bill has already passed first reading. I would strongly urge people to contact their MPP's to learn more and weigh in on this matter.

Gawd knows that the insurance industry needs an overhaul but I'm not convinced this is in anyone's best interests, (other than the MPP who proposed it and his constituents).

[VifferFun]

You live in an area known for poor driving and fraud. You might be the perfect driver but all the other people are out there are trying to crash into you. Insurance companies should rate not only where you live but the areas you drive thru on your daily commute.

It would be nice if the insurer could determine *where* you are driving, but that info is difficult to capture. Aviva in the UK (and perhaps in Canada?) has been experimenting with voluntary units that connect to your car and report your driving patterns (locations, time of day, speed, etc.). For agreeing to have the monitoring unit, the client receives a discount. It's completely optional.

[VifferFun]

I don't read legalese but I think this is the contentious portion.
(1.5) Insurers are prohibited from using a geographical region in which an insured person resides as an element in classifying risks for a coverage or category of automobile insurance.

There is a lot more in this bill but I'll damned if I can figure out just what it says.
http://www.ontla.on.ca/web/bills/bil...etail_the_bill

If I understand correctly this bill has already passed first reading. I would strongly urge people to contact their MPP's to learn more and weigh in on this matter.

Gawd knows that the insurance industry needs an overhaul but I'm not convinced this is in anyone's best interests, (other than the MPP who proposed it and his constituents).

It means exactly what I said -- the high-risk regions would see premium decreases, and the low-risk regions would see premium increases.

If such a bill were to pass, I would suggest that they go a little less drastic by perhaps limiting the number of territories that an Ontario insurer may use. If you think of Ontario as a big jigsaw puzzle, we can currently split it into 51 pieces and charge each piece a different rate. The bill as tabled essentially limits us to a one-piece puzzle. The Gov't could simply lower the number of pieces we're allowed to use to, say, five. By lowering the number of pieces/territories, you would still see cross-subsidization of low-risk to high-risk, but not as drastic as eliminating territories completely. For example, Brampton would maybe be grouped with Mississauaga and Milton causing Brampton to decrease and Milton to increase. At least this is better than low-risk areas seeing a HUGE increases and Brampton seeing HUGE decreases.

As an extreme example, South Brampton residents can pay about five times more for Accident Benefits than Rural Huron County residents. The reason? Well, Brampton residents CLAIM about five times more than Rural Huron County residents. Is it fair that the residents of rural Huron county should see huge increases in AB premiums (they would triple) in order to subsidize the decreases of Brampton residents (which would be cut in half)? This wouldn't be fair at all in my opinion, since the Brampton drivers are the problem, not the rural Huron county drivers. Brampton needs to figure out WHY their residents are claiming so much and correct the problem, rather that offloading their problem to the rest of the province.

[VifferFun]

I really don't see this ever passing since the MPPs in regions negatively impacted by the change would never vote in favour of it. Also, the changes are contradictory to actuarial principles. There is also more to Bill 45 than just the removal of territory rating, and the removal of rating by territory completely contradicts their proposed 6.b.ii:



Refusal to approve (6) The Superintendent shall refuse to approve an application under section 410 if, (a) the proposed risk classification system does not comply with section 410; or (b) he or she considers that, (i) the proposed risk classification system or rates are not just and reasonable in the circumstances, (ii) the proposed risk classification system is not reasonably predictive of risk or does not distinguish fairly between risks, or (iii) the proposed rates would impair the solvency of the applicant or are excessive in relation to the financial circumstances of the insurer.



The more I read read about the bill, the more holes I find. No offense to Jagmeet (as I'm sure his intentions are good), but the proposed bill is almost laughable.

[iFly55]

it's unfair to compare Brampton and rural Huron County

Brampton has 10x the population of Huron County: more drivers, more cars, increased traffic congestion obviously a recipe for accidents and accident claims

this is not about poor driving habits or overzealous accident benefit claims, it's about population density