Ontario Finance Minister Dwight Duncan announced on Monday that the province will lower the minimum medical and rehabilitation coverage for auto insurance to $50,000 from the current $100,000 in a move that will help Ontarians save money. Weeks of public anger and discontent about double-digit rate hikes for all motorists pushed the government to act, hoping to avoid consumer backlash.
The minister said that motorists will be given the choice of saving money by buying a new basic policy that offers lower coverage limits and fewer benefits. "People can lower their premiums based on their choices, but the Ontario basic policy is, in fact, still one of the best in the country," he said. "We believe that this will hold the line over the next few years on rate of growth in premiums."
The Opposition warned Monday that such a move could leave drivers without adequate protection."I find it unfortunate that the only way you can control your rates under (Premier) Dalton McGuinty's proposal is to take less in benefits," said Progressive Conservative Leader Tim Hudak.
Additionally, the New Democrats called the government's strategy of having drivers pay less for less coverage a "bone-headed idea," and accused the Liberals of caving in to the powerful insurance industry.
The Insurance Bureau of Canada, however, hails the move as innovative and provides consumers with the right to choose their coverage more appropriately. The IBC said the average Ontario driver was paying $1,362.11 a year for insurance in September, up 3.6 per cent from $1,314.26 at the same time last year. Conversely, insurance companies lost over $400 million dollars in the auto sector last year, which justified the recent hikes.
The proposals are not expected to take effect until next summer, but this will allow insurance companies to reassess their rates and lower them.
Comments