Province unveils more plans for auto insurance reform

Ontario has focused its 2020 budget on addressing the serious health and economic impacts of COVID-19 – and the government’s plan to reform the auto insurance market has been lauded by Aviva Canada.

Finance Minister Rod Phillips unveiled “Ontario’s Action Plan: Protect, Support, Recover” yesterday. The province has earmarked a total of $45 billion to support more than three years of programs and resources to support Ontario locals and businesses impacted by the pandemic.

In the action plan, the government said that it would continue to monitor the impact of COVID‑19 on the auto insurance system, to “make sure consumers are being treated fairly during these challenging times.”

The government had already helped consumers earlier this year, when it enabled almost $1 billion in consumer savings during the pandemic, affecting 93% of Ontario drivers.

For the next phase of its plans for Ontario’s auto insurance system, the government will be focusing on the following reforms:

• Increasing competition and innovation in the auto insurance sector by modernizing outdated, burdensome requirements. This includes permitting insurers to electronically terminate policy contracts, with consumer consent, to enable fully digital insurers to operate in Ontario. The government is also proposing to allow FSRA to operate an insurance regulatory sandbox to pilot initiatives that bring new consumer-focused products and services to market more quickly in response to changing consumer needs.
• Improving deterrence of fraudulent activities that drive up auto insurance system costs by proposing changes that would allow insurers to reject vehicle damage claims where misrepresentation or fraud is involved. The government has also established a task force to improve provincial oversight of the towing industry.
• Increasing choice for consumers by enabling insurers to offer more coverage options, including optional not-at-fault property damage coverage for drivers who may determine that insuring their older vehicle costs more than the vehicle is worth. The government is also proposing to increase convenience for consumers by allowing credit unions to sell insurance in their branch, and online through a subsidiary or partnership.

These proposed reforms have been praised by Aviva Canada.

"We are pleased to see the Ontario government promoting innovation in the insurance industry,” said Aviva Canada managing director of personal insurance Phil Gibson in a statement. “This is a step in the right direction that will give insurers more room to innovate and offer more customized products that better meet the needs of our customers and drivers in Ontario."