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Does Bill 15 Actually Reduce My Auto Insurance?

Posted by Auto Loan Solutions

Ontarian drivers have long felt the agony of ever-increasing auto insurance rates – a hike of 11.4 percent occurred from 2004-2012 alone! Well, it seems like our provincial legislature is finally hearing auto owners’ plead for an insurance reduction with the passing of Bill 15 on Nov. 20, 2014.

But is This Enough of a Change?

Known as the “Fighting Fraud and Reducing Automobile Insurance Rates Act”, Ontarians could be looking at a 15 percent reduction in automobile insurance by August 2015, strengthening consumer protection, not to mention shielding auto owners from insurance and tow-truck fraud.

Sounds like a definite win for people who pay auto insurance, right?  Well, there may be a bit of corrosion under the shiny hood here.

For instance, it will be a while until auto insurance payers can reap the benefits of this bill (if at all). Finance Minister Charles Sousa’s first vow of a 15 per cent reduction was made in August 2013. However, from then to August 2014, the rates have only seen an unsatisfactory 6 percent reduction.

Photo: Canadian Underwriter

Your insurer can also refuse reducing their rates if they are able to prove incapable of doing so.  Given that this is an average percentage reduction, some may save more than others depending on individual cases. Your location can also be a factor, as insurers set their prices by territory. Other aspects may be taken into consideration as well, depending on your driving record, car type, etc.

Recently, Ontario Trial Lawyers Association (OTLA) president Steve Rastin exposed a clause in the bill that enables the removal of motorists’ right to sue their insurer if their claim is denied.  The OTLA supports the majority of the bill, but deem “the removal of the right to sue, and reducing the interest rates that injured claimants get on their money from insurance companies — which is kept in a reserve account — from 5 per cent to 1.3 per cent as completely unacceptable”.

What Does This Mean?

The prejudgment interest (which is the interest paid to the injured for non-pecuniary damages such as pain and suffering) decreasing from 5 percent pre-Bill 15 to 1.3 percent post- Bill 15 means insurers have some leeway to delay payments.

A revamp in the dispute resolution system will also take place.

Pre-Bill 15, motorists requiring compensation or benefits for various things, such as loss of income or required treatment, were able to send in an application to their insurer and sue their insurer if these benefits were denied.  However, once Bill 15 comes into effect, a settlement meeting will occur to initiate the process of dispute resolution. If the settlement meeting is unsuccessful, then an arbitration application must be filed. The scale of the dispute is then considered to see if the injured party is entitled to a paper hearing, an expedited in-person hearing, or a full in-person hearing.

However, there is a silver lining.

Bill 15 seems to uphold its promises of fighting fraud to ensure consumer justice. While this could mean trouble for some tow truck companies, it is a huge win for auto owners.

Now, not everybody in the towing business are bad apples. Most are a vital part of keeping our roads safe and clear of gridlock. The few that taint the reputation of the industry, however, have taken advantage of the unregulated, off-record ways of processing tows, creating a feeding frenzy to overcharge consumers for services and storage fees. Coercing motorists into signing waivers or consent forms as soon as they reach the accident scene have also become a commonality.

With the passing of Bill 15, consumers will (finally) be protected against the pressure to sign and ludicrous charges. It will enable benefits like:

  • A Tow and Storage Consumers Bill of Rights
  • Disclosure of information to consumers
  • The establishment of qualifications for tow and storage providers
  • Publication of rates
  • Requirements that tow and storage services provided to consumers be authorized

While it may seem like Bill 15 is adding a fresh coat of paint to an old car in some areas, the step to begin fraud-proofing and making judgments to benefit consumers is a sure start to correcting the system for good.

We at Auto Loan Solutions also value fair and honest deals for our customers. Check us out for all your auto financing needs! What do you think about the passing of Bill 15? Share your thoughts with us on Twitter, hashtagging #Bill15 and join our discussion on Facebook!

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