Ont. drivers pay highest insurance rates: study
Posted October 4, 2011 8:37 am.
This article is more than 5 years old.
Strict government regulation and fraud are among the reasons why Ontario drivers pay the highest insurance rates in the country, according to a study released this week.
A report by the Fraser Institute shows Ontario has the highest premiums in the country at an average of $1,200 per year, followed by British Columbia at just over $1,100.
Quebec has the lowest rates in the country at nearly $650.
The institute studied Canadian auto insurance rates between 2007 and 2009.
“The explanation for the high cost is higher claim costs per passenger vehicle, which is itself a result of a number of factors including regulatory severity and insurance fraud,” the report said.
The study shows average accident benefit claim costs in Ontario spiked by 102 per cent between 2004 and 2009. It also states that Ontario’s regulations in rate setting restrictions, mandatory minimum liability and accident benefit laws are responsible for the high rates.
Insurance fraud accounts for about 15 per cent of private insurers costs and more than $1.3 billion in claims payments go to drivers abusing the insurance system, the report states. Toronto is a “hub” for staged collisions orchestrated by organized crime rings, the institute said.
To report insurance fraud, call the insurance hotline at 1-877-422-8477
So why does Quebec consistently have the best rates in Canada? The report said two factors are responsible: “the limitation of the public monopoly to bodily injury claims coverage” and less-severe regulations.
Read the report here (.pdf).
