"Our government brought down auto insurance premiums in 1996, and our
action plan will bring them down again," said Eves. "We're following up on the
reforms announced last month and introducing new measures that equal more
savings for drivers. Hard-working, honest citizens who pay their premiums
deserve to be treated fairly."
As part of today's announcement, the government is introducing
cost-reduction initiatives that are targeting $1.2 to $1.3 billion in savings,
which insurers will be required to pass on to customers. Highlights include:
- Establishing a $100 million fraud-reduction target and establishing
an Auto Insurance Fraud Squad that will work with health
professionals' regulatory colleges and other enforcement agencies
to better control and detect fraud, abuse and vehicle theft;
- Reducing the premium tax on auto insurance from three per cent
to two per cent, saving consumers and taxpayers up to $90 million;
- Requiring insurers to achieve savings in administration and other
costs of up to $100 million;
- Tightening up on the abuse of income replacement benefits, by basing
this benefit on income reported for tax purposes only, and providing
more options in levels of income replacement benefits available to
purchase, generating up to $120 million in savings; and
- Allowing innocent accident victims the ability to sue for excess
medical and rehabilitation expenses while at the same time defining
the verbal threshold for general damage claims.
Previously announced initiatives -- including such things as a review of
fees charged by health care providers and the introduction of electronic
standard invoices -- will help meet the 15 per cent target.
To provide Ontario drivers with additional premium savings, the Eves
government will also design a new auto insurance plan to give consumers more
choice regarding the type of coverage they want. Depending on the individual
circumstances of consumers and the choices they make, they may save an
additional five to 20 per cent.
"By January 1, 2004, our goal is to finish the design of an auto plan
that will allow consumers to fully customize their coverage. This
customization has the potential to provide consumers with additional savings
depending on the options they select," said Sampson.
"Our government has a realistic and responsible plan," said Sampson.
"We're committed to giving families new options to choose insurance packages
that are more affordable and that are customized to meet their needs -- so
that they won't have to pay for expensive extras they may never use."
"Auto insurance is one of the biggest items in most household budgets and
our government is committed to making sure that consumers pay fair and
reasonable premiums," said Eves.