Ontario makes regulatory changes to ease auto insurance worries

BY JANIECE CAMPBELL

Good news for Ontario drivers!

The Ontario government is amending a regulation under the Insurance Act which allows auto insurers to issue premium rebates to policyholders. According to the Ministry of Finance, the amendment was to further “help ease the financial pressure on working people and families during this public health crisis.”

Through this amendment, insurance companies are now able to offer premium rebates to consumers for up to 12 months after the emergency has ended.

Ontario is the first jurisdiction in Canada to remove existing restrictions on rebating so auto insurers can provide additional consumer relief.

“Insurance companies indicated that the regulation preventing rebates was a barrier to providing relief to their customers,” said Rod Phillips, the province’s Minister of Finance. “That barrier has now been removed so auto insurance companies can step up and do the right thing for the people and families of Ontario.”

This announcement came just days after Phillips met with several CEOs of the major insurance companies, urging them to give drivers a break on premium payments that reflect the devastating impact of the pandemic.

“We are in an unprecedented time and people are experiencing extraordinary financial pressures,” said Rod Phillips. “My message to insurance companies has been clear: they should provide relief that reflects the financial hardships their dedicated customers are facing due to the COVID-19 outbreak.”

The province is not dictating a specific rebate percentage for companies to offer, though Phillips says it to needs to be “commensurate with the scale of duress that Ontario families are under.”

The Insurance Bureau of Canada (IBC) reinforced the idea of the regulation and also projected that with these rebates, insurers nation-wide can help to save financially burdened customers a whopping amount of money.

“We recognize that many drivers are no longer commuting or using their vehicle as regularly and their premiums should reflect the reduced risk. IBC expects this offer could initially result in $600 million in savings to consumers across Canada – more than half of that in Ontario alone,” said Steve Kee, IBC’s Director of External Communications.

Along with adjusting premiums for drivers, IBC member companies have committed to several other measures to continue helping Canadians such as exploring flexible payment options and waiving non-sufficient fund fees.

“These measures will continue for the next 90 days. Insurance customers whose driving habits have changed significantly or who are facing financial hardship as a result of the pandemic should contact their insurance representative,” noted Kee.

Several large insurers have already started to offer rebates, in some cases, even up to 75%.

Allstate Canada was among the first insurance providers to begin offering discounts due to the circumstances of the virus. With the expectation of cumulative payments totalling to $30 million, active clients who have paid their April premium will receive a 25% refund of their monthly paid statement.

Abdool Gafoor is a business development agent for Allstate who continues to work from home. “No company planned for this. No one was prepared,” he said. “But every company should be preparing for the unknown. If this situation prolongs, they should continue to ease the burden of people. We, as a society will have to partner together to pull through this. “

Many other companies are offering to defer payments for customers in financial difficulty and it’s encouraged that all drivers check their insurance companies in the case of any disruption to individual driving habits.

“All of us will remember how companies treat us during these unprecedented times. I often remind business leaders that their customers from the past five years are likely to be their customers for the next five years,” said Phillips.