Local Law Firm Takes Aim At Ontario Car Insurance Costs

Hello time traveller!!
This article is 3288 days old.
The information listed below is likely outdated and has been preserved for archival purposes.

A local law firm is weighing in on a recent study that says Ontarians are paying too much for car insurance.

Windsor personal injury law firm Greg Monforton & Partners agrees with the results of the Ontario Trial Lawyers Association’s recent conclusion that insurance companies are reaping the benefits while drivers are left with no choice but to overpay.

“According to the OTLA’s findings, Ontario consumers overpaid their insurance by $840 million in 2013 alone,” says firm partner Brad Robitaille. “This boils down to drivers paying more for auto insurance than is necessary.”

The study, published March 30th, was conducted by researchers at York University who concluded that an 11% return on equity profit benchmark has allowed for insurance premiums to be set too high.

“Premiums have been too high, and consumers in Ontario have been paying too much for auto insurance,” the authors said in the study. “The combination of a return on equity cap of 5.8 per cent, the 10-year rolling average for 2013, and a lower operating cost assumption could reduce auto insurance premiums by at least 7.9 per cent based on 2013 data.”

“The profits of insurance companies have to be curbed in order for these savings to be passed on to the consumer,” said Robitaille. “The rate needs to be adjusted so it’s appropriate for our economy, and the OTLA’s report indicates that this is possible without cutting any benefits.”

But the Insurance Bureau of Canada responded this week by calling the study “misleading” and “self-funded” and made a call to personal injury lawyers to reduce the amounts they take from accident victims.

“Real reforms to the auto insurance product have been ongoing and continue and are reducing the cost of auto insurance in Ontario,” said Insurance Board vice president Ralph Palumbo. “Perhaps it is time that lawyers also reduce their fees to further reduce costs to consumers.”

Despite the dispute, both sides are pushing the government of Ontario to make changes and local firms like Robitaille’s plan to get the attention of politicians so that auto insurance particulars can be reassessed.

“We are trying to alert politicians to these facts so something can be done,” Robitaille said.

Palumbo too pledged to work with the government.

“The insurance industry is working successfully with the Ontario government so that the auto insurance product works for consumers,” he said. “This, of course, is not easy, but it can be done.”