Brokers must advise clients on changes to auto insurance

Brokers must advise clients on changes to auto insurance

Brokers must advise clients on changes to auto insurance Ontario auto insurance is changing and brokers will need to educate their clients to ensure they have the best coverage for their lifestyle.

The Insurance Brokers Association of Ontario (IBAO) said it is preparing to launch a multi-faceted awareness campaign on Ontario Auto Reform, ahead of new changes coming into play June 1, with the aim of combatting widespread fraud and abuse of the system.

Back in 2014, the provincial government passed the Fighting Fraud and Reducing Automobile Insurance Rates Act. In a nutshell, new regulations include lower accident benefit limits in standard insurance policies, new options to increase coverage, new procedures for payment and a mandatory Winter Tire Discount (up to 5%) offered by insurance companies across Ontario.

The winter tire discount came into play as of January 1, while most changes come into effect June.

“It’s important consumers understand that Ontario Auto coverage is changing,” said Jim Murphy, IBAO CEO. “These changes continue the trend of more choice for consumers – products can be tailored to suit individual needs and budget.

“Client lifestyle is a real focus of this campaign. This is a tremendous opportunity for brokers to lead the conversation with their clients and ensure they have the best coverage for their lifestyle,” Murphy added.

But the IBAO acknowledges that car insurance can sometimes come with negative connotations, but remind consumers that insurance is a safety net, protecting against risk; insurance is a critical factor in individual and collective welfare.

The opportunity with this new set of measures is to step back and look at what your client really needs. Does their employer provide a Group Insurance Plan? Look into what that policy covers, as most benefit packages are limited to $500/year per practitioner, which can be exhausted quickly even in cases of minor accidents.

Client with dependents, like children or elderly parents, who would care for them in the event of injury?

The IBAO reminds brokers to inform clients that standard policies are just that – standard. They don’t include benefits like dependent care, and that gaps might exist depending on the lifestyle. The good news is there’s opportunity to fill those gaps by increasing coverage or adding options to cover specific areas.

The IBAO campaign will include broker education, including an on-demand webinar that reviews changes and the transition process and a panel discussion featuring insurers, legal experts and brokers – that takes a more in-depth look at the implications changes will have on consumers.

In related news, the IBAO is addressing concerns over MTO and Service Ontario, after broker feedback indicated instances of delayed connectivity between a broker's issuance of an auto policy and proof of insurance when the client arrives at the MTO or Service Ontario office.

A directive from the MTO will be sent to Service Ontario offices to reconfirm that proof of insurance by way of a liability certificate (even a faxed copy) will enable your customers to renew their stickers.

If your clients continue to have problems getting renewal stickers, the IBAO requests the location of the Service Ontario office. This will help the MTO identify those areas which may require further training.
  • Jokelee Vanderkop 2016-01-22 5:25:29 PM
    Ontario auto insurance has definitely changed since 2010 and continues to change for the worst. Under the guise of fighting fraud, all benefits continue to be dramatically cut with many cuts implemented this June. But worse, almost one out of every 2 claimants doesn't get them when necessary in any case. Even if upgrades are made to standard policies, the upgrades are also insufficient. So what "safety net" are we talking about when far too many legitimate claimants have to fight for years to receive these ever-decreasing benefits, no matter the policy enhancement. The policy upgrades are touted as providing choice - tailored to individual needs and budgets - tell that to a seriously injured motor vehicle accident victim who gets put in the MIG (minor injury category) and can't "escape" the $3,500 maximum treatment in order to access the benefits for the seriously injured: now $50,000 in treatment benefits down from $100,000. Tell that to a non-earner who has been seriously injured and can only access $185 per week for two years maximum and then end up on ODSP. And does the public know that as of April 1, 2016, wrongfully denied claimants can no longer take their insurer to court. Want more detail - go to
    Jokelee Vanderkop
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  • Brian 2016-01-23 8:55:29 AM
    RE: "In a nutshell, new regulations include lower accident benefit limits in standard insurance policies, new options to increase coverage"

    How does slashing treatment benefits for the catastrophically injured help fight fraud? The IBAO's Alice-In-Wonderland up-is-down-and down-is-up fraud fighting rhetoric has managed to overtake even that of the IBC. How do brokers benefits from vilifying the injured (even the most seriously injured) in the way the IBAO has - and in the way this journal has? Do you people people really believe quadriplegics are exaggerating their injuries for secondary gain. Of course you don't. Your slurs are aimed at endearing yourselves with the insurers with whom you seek to cultivate more business.
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  • Brian 2016-01-26 9:20:17 AM
    Ontario's "foremost expert" on auto insurance weighs in:

    Wednesday, 20 January 2016
    Ontario's Failed Rate Reduction Strategy
    The promise to reduce auto insurance premiums by 15% is a failure.

    In August 2013 the Ontario government announced a two-year rate reduction strategy. What has ensued since that announcement has been a series of reforms to bring down the cost of insurance. Many of those reforms include no-fault accident benefit reductions.

    So how successful has the strategy been? Last week FSCO posted the fourth quarter rate approvals for 2015. The FSCO post indicates that rates fell a minuscule 0.15% in the quarter. For the entire year, rates fell by just 1.0%. Since August 2013, rates have only come down by 7.1%. That's not even half of what the government has been trying to achieve.

    Premier Kathleen Wynne now calls the 15% rate reduction strategy a "stretch goal". That's as close as you're going to get a government to admit to failure.

    Another round of no-fault accident benefit cuts are to be introduced on June 1 of this year but don't expect them to bring down rates by a significant amount. The accident benefits portion of the Ontario in 2014 was only 33.5% of claim costs (see the chart below). That would mean for a further 8% reduction in premiums, accident benefit costs would have to go down by about 24%. Meanwhile, some of the accident benefit cuts will drift over to third party liability costs since not at-fault accident victims will be able to sue for benefits no longer available through no-fault.

    It's time the government undertake a comprehensive review of the auto insurance system and resolve the systemic problems plaguing the system. Half measures lead to "stretch goals" and chronically high insurance premiums.
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