Contingency fees driving up insurance prices in Ontario

Contingency fees driving up insurance prices in Ontario

Contingency fees driving up insurance prices in Ontario “Ontario drivers pay too much for auto insurance,” Aviva Canada executive vice president of claims Irene Bianchi said in a company statement.

Citing a study by Osgoode Hall law professor Allan Hutchinson, the firm noted that there is a need for “complete disclosure and transparency on legal issues” that are contributing to the rise in insurance costs in the state.

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“Contingency fees are one of the key drivers of claims costs, and, as a result, increase insurance premiums that all Ontario drivers have to pay,” Bianchi went on to say.

Ontario drivers pay 24% more than their counterparts in Alberta and 72% more compared to motorists in Atlantic Canada, data from the Insurance Bureau of Canada revealed.

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“The cost difference between the provinces isn’t more accidents or a higher population density. Instead, it can be directly attributable to the large amount of costs taken from the system that do not contribute to helping accident victims,” Bianchi further observed.

The statement also noted “recent revelations on referral fees and advertising costs in the personal injury legal community.”  Ontario drivers are shelling out for these expenses as part of the premiums they pay for their car insurance, the executive also said.


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8 Comments
  • Brian 2017-01-26 12:53:00 PM
    Yes. Contingency fees need a look. Insurance business is quick to jump all over that issue but sticks its head in the sand re "hired guns" in lab coats with multiple judicial rebukes for their shoddy, partisan insurer assessments (see NP and Star coverage). Clearly you select your new with an eye toward pleasing your insurance industry audience - and screw their customers.
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  • Paul - Editor 2017-01-26 1:02:13 PM
    Hi Brian... appreciate your feedback. I think we have proven however, that we will cover any relevant stories for the insurance industry irrespective of whether they are positive or negative. We're always open to hearing story suggestions. Feel free to email me any time if you'd like to raise an issue. Thanks.
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  • Jokelee Vanderkop 2017-01-26 3:59:55 PM
    Why focus just on contingency fees, thus laying, in fact, the brunt of the blame on personal injury lawyers for high insurance costs. Insurers need to also accept responsibility for high costs. Claimants don't want to have to hire a lawyer to get the accident benefits they're owed but no injured party gets through the auto insurance dispute resolution system successfully unless they hire a lawyer.

    Insurers retain high-priced defence lawyers to too often back up unscrupulous, dishonest, or downplayed IME assessments of injuries by equally high paid insurer-hired medical experts. It costs a lot to keep these IME rogue experts in the stable to benefit the insurer outcome rather than claimants. What about an automatic $36,700 deductible for insurers on tort settlements. That's no small change and it benefits the insurer.

    The March and October 2015 Schulich Reports by Professors Fred Lazar and Eli Prisman show that the auto insurance industry has been very profitable for a long time and that policyholders have been over-paying on average $100-$120 per year. The companies that weren't profitable were so not profitable, due to bad management, that they should not have been allowed to stay in business. And now, accident benefits have been further reduced in June 2016 from already dramatic benefit cuts in 2010.

    It's time the auto insurance industry cleaned up its act, cleaned out its IME assessor stables and paid policyholders who are injured what they promised to pay in their policies. Insurers and the IBC need to stop pointing the finger elsewhere for high premium and insurance costs, and stop putting shareholders and the corporate bottom line, despite their government-approved 6% Return on Premium benchmark which works out to a 12% annual return on equity, ahead of injured accident victims.

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