Bill 45 - An Auto Insurance Amendment Act

[DoubleJ]

All bull *****, it will never pass.

[VifferFun]

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

Indeed, Brampton and Rural Huron County are completely different, which is why they should be paying different rates. Whether it's due to population density, idiot drivers, people milking the system, money-hungry lawyers, or otherwise, the reasons don't matter. The fact is that rural Huron County residents claim much MUCH less on AB than Brampton residents, so they should pay a MUCH smaller premium to be fair. Population density is not the issue with Brampton, but rather the people driving there. The claims experience in downtown Toronto (more dense than Brampton) is much better than Brampton.

The proposed bill makes a lot of changes without going into specifics. The "order of importance" for rating variables that is mentioned doesn't even make sense. I can't even tell you which rating variable is most significant to an individual's rate, since it completely depends on the individual. For someone living in Brampton, territory is probably the most significant variable; however, for someone living in London, annual kilometers driven might be the most significant. etc. Your rate is calculated by multiplying many factors together, such as the following simplistic examples:


Example #1 with Territory:
Premium = (Base Rate) * (Territory Factor) * (Years Experience Factor) * (Years Claims Free Factor) * (Commute Factor) * (Annual kms Factor) * (Discounts )
Premium = ($1000) * (1.560) * (0.800) * (0.800) * (1.350) * (1.100) * (0.750)
Premium = $1390

Example #2 with Territory:
Premium = (Base Rate) * (Territory Factor) * (Years Experience Factor) * (Years Claims Free Factor) * (Commute Factor) * (Annual kms Factor) * (Discounts )
Premium = ($1000) * (0.650) * (1.500) * (1.400) * (1.000) * (0.750) * (0.800)
Premium = $819



Now what if we removed Territory rating? Something like the following would result:

Example #1 without Territory:
Premium = (Base Rate) * (Territory Factor) * (Years Experience Factor) * (Years Claims Free Factor) * (Commute Factor) * (Annual kms Factor) * (Discounts )
Premium = ($1000) * (1.000) * (0.800) * (0.800) * (1.350) * (1.100) * (0.750)
Premium = $713

Example #2 without Territory:
Premium = (Base Rate) * (Territory Factor) * (Years Experience Factor) * (Years Claims Free Factor) * (Commute Factor) * (Annual kms Factor) * (Discounts )
Premium = ($1000) * (1.000) * (1.500) * (1.400) * (1.000) * (0.750) * (0.800)
Premium = $1386

[nobbie48]

All bull *****, it will never pass.

Warning! No proposal is so stupid that it can't pass. An idea so stupid that it seems laughable might pass because everyone stood around laughing instead of opposing.

[OpenGambit]

I am with you Viffer, Territorial pricing makes sense, and is effective.

+ is completely asinine to be able to differentiate between sex, age ( enumerated grounds under section 15 of the Charter) and not be able to differentiate based on territory.

[VifferFun]

Warning! No proposal is so stupid that it can't pass. An idea so stupid that it seems laughable might pass because everyone stood around laughing instead of opposing.

The Insurance Bureau of Canada will not sit idly by -- they will make sure that the Gov't understands the bill before it is ever passed. If MPPs understand the implications to rates in their riding, there will be a lot of opposition within the Gov't itself.

[kwtoxman]

I am with you Viffer, Territorial pricing makes sense, and is effective.

+ is completely asinine to be able to differentiate between sex, age ( enumerated grounds under section 15 of the Charter) and not be able to differentiate based on territory.

The supreme court of canada exempted discrimination of sex and age in insurance determination years ago because they found no viable alternative that existed in determining risks. Well that decision is ripe to be revisited now because there are jurisdictions in Canada where none of this discrimination occurs. I now live where insurance does not discriminate based on territory..... nor sex,age, etc. It is only based on driving history. Before moving, I lived in Brampton for 10 years, no accidents or tickets. And obviously got discriminated against for rates. Thank god I'm out of Ontario now.

Not surprising Vifferfun is against it, his job wouldn't exist if discriminatory factors weren't used to generate rates.

[DOHC1]

How about this..
If we stop rating premiums based on where people live, the insurance company who can balance
a) controling fraudulant claims the best,
while at the same time
b) not making their clients jump through hoops to make legitimate claims

gets to stay in business and get more of the market share. Theres something very very wrong with the way insurance companies are handling claims if some people are claiming 5x more than other.. Isolating the areas where these claims are comming from and raping everyone within that area with high rates is NOT a solution. Insurance companies are doing a ****** job at how they regulate their claims and are simply drawing lines, and isolating the problem rather than fixing it. I remember reading on here that insurace companies make about 7-10% profit.. well if you do a ****** job and people are scamming you left right and center, maybe the money should come out of the profits and not out of my pockets.

[nobbie48]

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



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.

He may be true and honest but that doesn't stop him from ignoring the truth that Brampton is a burden on the insurance companies.

Instead of putting in real work to resolve the real problem and make people responsible for their own actions, even as a group. He wants to make things worse by relieving Brampton drivers of their insurance responsibilities.

"If you screw up you pay up" is reality. This bill is another con game. Getting someone else pay your bills equates to them accepting responsibility for your or your community's bad driving.

[slowbird]

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.

I recently participated in a study like this for the Ministry of Transportation. But it was voluntary, and with no rewards.

[Corey McNeely]

The supreme court of canada exempted discrimination of sex and age in insurance determination years ago because they found no viable alternative that existed in determining risks. Well that decision is ripe to be revisited now because there are jurisdictions in Canada where none of this discrimination occurs. I now live where insurance does not discriminate based on territory..... nor sex,age, etc. It is only based on driving history. Before moving, I lived in Brampton for 10 years, no accidents or tickets. And obviously got discriminated against for rates. Thank god I'm out of Ontario now.

Not surprising Vifferfun is against it, his job wouldn't exist if discriminatory factors weren't used to generate rates.

Actually his job would still exist, do you think that your provincial carrier doesn't employ actuaries??? This rating basis is no more discriminatory than, taxes that vary from city to city, housing prices from region to region, gas prices from different regions. If you live in an area where there is high vehicle thefts then you would have to pay more for that coverage, it called logic.

I live in Brampton and pay high rates, but I also bought a home that is almost $100,000 less than if I bought the same one in Oakville or Mississauga. Maybe I pay more for insurance but there are other things that I pay much less than other areas.

[kwtoxman]

Actually his job would still exist, do you think that your provincial carrier doesn't employ actuaries??? This rating basis is no more discriminatory than, taxes that vary from city to city, housing prices from region to region, gas prices from different regions. If you live in an area where there is high vehicle thefts then you would have to pay more for that coverage, it called logic.

I live in Brampton and pay high rates, but I also bought a home that is almost $100,000 less than if I bought the same one in Oakville or Mississauga. Maybe I pay more for insurance but there are other things that I pay much less than other areas.

You don't get it. My jurisdiction only rates insurance based on driver history and provincial claims. It is a lot less work than the multiple 'risk' factors that ON uses, hence many less jobs. Kinda sad that essentially you think the surpreme court of canada is wrong when they said that basing insurance rates on age, sex, etc. is discriminatory. Most people aren't big on discrimination.

[Corey McNeely]

Zurich Insurance Co. v. Ontario (Human Rights Comm.) (1992), 16 C.H.R.R. D/255 (S.C.C.)



The majority of the Supreme Court of Canada finds that Zurich Insurance did not discriminate against Michael Bates contrary to the Ontario Human Rights Code by charging him higher premiums for automobile insurance because of his age, sex, and marital status.

Do you have any more current Supreme Court of Canada decision that differs from this?

[jaymurr]

I'll reserve judgement on this until I find out if Barrie is in the high risk category.

[kwtoxman]

Zurich Insurance Co. v. Ontario (Human Rights Comm.) (1992), 16 C.H.R.R. D/255 (S.C.C.)



The majority of the Supreme Court of Canada finds that Zurich Insurance did not discriminate against Michael Bates contrary to the Ontario Human Rights Code by charging him higher premiums for automobile insurance because of his age, sex, and marital status.

Do you have any more current Supreme Court of Canada decision that differs from this?

Did you even read the decision beyond the first sentence? It finds that he was discriminated against, but they allowed it because of a lack of an alternative; they found no better system existed to determine rates. Well, there is a system now, as I referenced in my previous posts, it is in my jurisdiction and a few more. That finding is now ripe for a revisit.

[Corey McNeely]

Did you even read the decision beyond the first sentence? It finds that he was discriminated against, but they allowed it because of a lack of an alternative; they found no better system existed to determine rates. Well, there is a system now, as I referenced in my previous posts, it is in my jurisdiction and a few more. That finding is now ripe for a revisit.

I read the entire document. Which is why I agree with the S.C.C. Somehow you have stated that I disagree with their view. I don't, I believe this is the best method that we have at this time. If something else comes along that is better then giddy up. My point was that there are lots of things that people pay for that are "discriminated" against (taxes, housing prices, natural resources) There is a point of difference that needs to be accounted form when determining the cost on most products and service. Why would insurance work any differently?

Are you not yourself taking advantage of this discriminatory rates? Your jurisdiction is relying on provinicial data instead regional, why should not then account for the other provinces. No difference then different postal code or city.

[Platinum Cycle]

If I lived in Harcourt Ontario, where there is only one other car in town I would assume the likelihood of me getting into an accident is much less than say Toronto, Brampton, Montreal or any other major city.
For that reason alone I'm sure we can all expect the premiums in Harcourt would be less.

Now, if We compare the likelihood of an accident in Brampton versus say Toronto, if there is a greater chance of an accident in Brampton, and the costs associated with that claim are also higher than Toronto (due to the frequency of injury claims etc) wouldn't it stand to reason the insurance company would want to charge a higher premium for Brampton?

For the record, claims frequency (how often claims occure) and severity (i.e. how much it costs to settle a claim) is higher in Brampton.

Premiums are based on frequency and severity.

Therefore premiums are higher in Brampton. End of story.

My only surprise is that the MPP in Brampton hasn't requested an inquiry to see why their frequencies and severities are higher. But, then again, that might only shed light on the problem, it's much easier to pretend to be a victim and demand other jurisdictions subsidize their higher claims costs.

[VifferFun]

You don't get it. My jurisdiction only rates insurance based on driver history and provincial claims. It is a lot less work than the multiple 'risk' factors that ON uses, hence many less jobs. Kinda sad that essentially you think the surpreme court of canada is wrong when they said that basing insurance rates on age, sex, etc. is discriminatory. Most people aren't big on discrimination.

I like people to pay premiums proportional to their risk; however, if the Gov't wants to eliminate key allowable rating variables then it won't impact individual insurance companies significantly. The impact is on the policyholders -- lower-risk policyholder will see increases, and higher-risk policyholders will see decreases. It doesn't seem fair to the lower-risk policyholders. In the end, if the company was taking in $1B in premium before, they will continue to take in $1B in premium after. Less segregation does imply less actuarial work, but I'm not concerned -- for every project I'm working on there are at least ten others that I'd like to be doing.

[VifferFun]

I'll reserve judgement on this until I find out if Barrie is in the high risk category.

Barrie is definitely a MUCH lower risk than Brampton, and probably a lot lower than any part of Toronto. I'm sure that Barrie would be on the losing end of the deal if such a bill were to pass. I don't have my numbers on me to check.

[VifferFun]

How about this..
If we stop rating premiums based on where people live, the insurance company who can balance
a) controling fraudulant claims the best,
while at the same time
b) not making their clients jump through hoops to make legitimate claims

gets to stay in business and get more of the market share. Theres something very very wrong with the way insurance companies are handling claims if some people are claiming 5x more than other.. Isolating the areas where these claims are comming from and raping everyone within that area with high rates is NOT a solution. Insurance companies are doing a ****** job at how they regulate their claims and are simply drawing lines, and isolating the problem rather than fixing it. I remember reading on here that insurace companies make about 7-10% profit.. well if you do a ****** job and people are scamming you left right and center, maybe the money should come out of the profits and not out of my pockets.

I agree -- nothing would be better than to put an end to some of the ridiculous settlements. The problem is that once the claim goes to court, the court decides the "reasonable" settlement, and their definition of "reasonable" is increasing every day. As claim settlements increase, then the premiums that must support those claims increase.

Someone like Platinum_Cycle could better explain the reasons why Brampton claims (severity and/or frequency) are much higher than the rest of the province.

[OpenGambit]

The supreme court of canada exempted discrimination of sex and age in insurance determination years ago because they found no viable alternative that existed in determining risks. Well that decision is ripe to be revisited now because there are jurisdictions in Canada where none of this discrimination occurs. I now live where insurance does not discriminate based on territory..... nor sex,age, etc. It is only based on driving history. Before moving, I lived in Brampton for 10 years, no accidents or tickets. And obviously got discriminated against for rates. Thank god I'm out of Ontario now.

Not surprising Vifferfun is against it, his job wouldn't exist if discriminatory factors weren't used to generate rates.

I see no reason why regions of the province who have lower accident rates should subsidize the insurance of regions that have much higher rates.