EDITORIAL: The Liberal auto insurance plan, a 15-year failure


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All governments break their promises.

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It is naive to think that any political party can predict exactly where their political statements will lead them.

There are always complications, unintended consequences and unforeseen circumstances.

On the other hand, voters tend to expect that the government they put in power will more or less keep the promises they have made, or at least move substantially in the right direction towards these promises.

When that does not happen, as is the case with the Ontario Liberals who have repeatedly broken promises for 15 years to tackle rising auto insurance premiums, voters should reasonably conclude that their government is either hopelessly incompetent or doesn’t care.

A new report from the Ontario Trial Lawyers Association (OTLA) reveals that drivers in this province have been overcharged by $5 billion to $9.2 billion for auto insurance premiums over the past 5 years – while profits of insurance companies increased by 57% from 2012 to 2016 – both suggest.

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While the industry disputes the OTLA’s numbers, there’s no doubting the Liberals’ failure to keep auto insurance rates fair or affordable.

That’s what former Premier Dalton McGuinty first promised to do before the 2003 election campaign in a policy document titled Lower Rates for Change: Ontario’s Liberal Plan for Auto Insurance.

McGuinty has promised to freeze rates, cut them by 10% within 90 days of taking office, another 10% later, to reduce fraud and reform the province’s regulated auto insurance market .

Instead of changing, rates have climbed – up to 42% since then, against a 29% rise in inflation.

Auto premiums soared under Kathleen Wynne despite her 2013 pre-election pledge to cut them by 15%, a promise Wynne later called a “stretch goal.”

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They climbed despite later promises to lower rates and crack down on fraud (half of all Ontario insurance companies raised rates this spring).

The perverse reason Ontario drivers have falling accident and claim rates and rising insurance premiums, according to the OTLA report, is that the Liberals failed to hold the insurance companies cost and profit makers – 99% made a significant profit in 2016 in a regulated industry.

Everyone wins, except Ontario drivers.

If the government had been tougher on insurance companies, it could have lowered rates by 15%, according to the OTLA report.

Instead, the Liberals cut costs for insurance companies and forced drivers to accept ongoing rate hikes.

That hardly seems fair, to use the language of the current government, or what has been promised.

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