What
Auto Insurance
Reform
Means to You
!
not at-fault accidents and claims;
insurance coverage they need. These reforms provide
!
minor damage where no claim is paid;
many consumers with an average overall savings of 20
!
non-sufficient funds (NSF) cheques;
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another company refusing to insure the
individual;
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lapse in coverage (unless the lapse is
caused by a policy cancellation for failing
to make payments; failure to disclose a
conviction or claim that would cause higher
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licence suspension for driving with no
insurance).
Government has brought in a series of auto insurance
reforms to ensure consumers pay a fair price for the
per cent, significantly more for young drivers, up to 46
per cent.
As of August 1, 2004:
!
A nine per cent reduction in Third-Party Liability
premiums based on a $2,500 deductible on
pain and suffering claims, lost wages paid on
100 per cent of net wages instead of gross
wages, and elimination of double recovery of
A company can no longer refuse coverage based on:
insurance claims.
!
age, gender or marital status;
age of vehicle (may request an inspection
after eight years);
not having other policies with the company,
known as tied selling;
the individual currently being in Facility
Association.
Mandated reductions on collision (27-37 per
cent), comprehensive (19 per cent), and
uninsured motorist (11 per cent) coverages,
resulting in average premium reductions of 15
per cent (including the nine per cent reduction
on liability).
!
The introduction of new underwriting guidelines
used by insurance companies to determine rates
and whether to insure a person. An insurance
company is no longer able to refuse coverage or
rate individuals solely based on:
!
Claimants will have a 25 per cent reduction in their
compensation for not wearing a seatbelt.
!
Drivers may now legally exclude anyone from
coverage. This includes parents wanting to exclude
driving-age children from their policy.
May 2005
What Auto Insurance Reform Means to You
!
Disclosure to drivers placed in Facility
Association to ensure they are fully aware that
they are in Facility Association, why they are
there and what they can do to get out.
!
Increased penalties for uninsured drivers and
30-day impoundment of vehicle.
!
Other consumer protection measures, including
mandatory monthly payment plans and interim
claims payments until the amount is settled.
As of March 17, 2005:
Government introduced a new process by which rates
are set. Insurance companies are now required to
actuarially justify all rate increases to the Public Utilities
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used by the Board used minimum and maximum
benchmarks in setting rates, with requests for rate
increases within the benchmarks being automatically
approved.
As of August 1, 2005:
!
Rating based on age, gender and marital status
is eliminated and companies are not permitted
to raise premiums of those over 25 years of age
as a result of this measure, unless it is
actuarially justified;
!
Companies are permitted to continue to offer
seniors discounts for ages 55 and older;
!
Mandated five per cent reduction of premiums
for private passenger vehicles, unless insurance
companies can actuarially justify to the PUB on
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Permitting group rating, which could provide
lower rates of between five and 15 per cent to
members of identified groups (ie: alumni
unions);
Contact Information
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Requiring insurance companies to complete a
Point of Claim Disclosure Form to be signed by
consumers to ensure consumers are adequately
informed of their rights when making a claim.
The form will ensure that companies disclose
that:
federal law permits insurance companies to
conduct surveillance of injured parties
making a claim without their knowledge or
consent;
it is a Criminal Code offence to make a false
or inflated insurance claim, and that the
claimant may be prosecuted;
an insurance company must advise a
policyholder of a third-party claim and the
final amount paid out;
an injured party can apply to court to receive
their claim settlement in periodic payments
instead of a lump sum;
an insurance company must settle a claim
as quickly as possible and, where fault has
been determined, to make interim payments
until the final amount of the claim has been
settled;
there is a $2,500 deductible on pain and
suffering compensation, and other
deductibles may apply to other coverages;
loss of income is based on 100 per cent of
net wages;
you cannot claim for the same coverage
from more than one insurance company;
your settlement can be reduced by 25 per
cent if not wearing a seatbelt contributed to
your injury.