|ONE THIRD OF ACCIDENTS NOT REPORTED TO INSURERS
Study says that the same driver with one ticket and one accident can pay between $2,051 and $17,468 for insurance in Ontario.
The furious debate over how much Ontarians really pay for auto insurance reached one conclusion yesterday -- consumers should shop around.
The Canadian Consumers' Association reported yesterday that Ontario's rates are, on average, 45 per cent higher than in British Columbia. And while Hamilton drivers pay the lowest rates in the Greater Toronto Area, their premiums are still far higher than in other Ontario cities. You can usually find a better deal. The Consumers group study almost 4 million quotes for insurance.
"Most drivers find the average company, rather than the lowest rate," sys Lee Romanov, founder of the Consumers' Guide to Insurance. She said most insurance agents and brokers are tied to just four or five carriers and some handle just one or two. That means many consumers aren't finding the best deal.
Bruce Cran, president of the Consumers' Association of Canada, said owners in Ontario are getting burned.
He says studies show a third of Ontario's car accidents aren't reported to insurance companies
"Consumers in Ontario have been clearly harmed by outrageous price increases for auto insurance over the past three years," says Cran, whose group released a report comparing rates in Ontario, Alberta and British Columbia.
Mark Yakabuski, vice-president of the Insurance Bureau of Canada, said the consumers report shows that there are outlets among Ontario's 150 insurers that offer comparable rates to the British Columbia's government-run monopoly.
"What I want to encourage people to do is indeed take advantage of what we have here in Ontario, a very competitive market," Yakabuski said.
"Look at the many, many other choices that you have before you make your final decisions as to whether you want to go with this company or that company."
The two sides did not agree on much else.
By studying close to four-million quotes in Ontario, the association concluded the province's average insurance premium is $2,384, compared to $1,325 in British Columbia and $1,715 in Alberta.
But Yakabuski says the real number is more like $1,279 and that rates have fallen by 15 per cent -- about $200 a vehicle -- over the past 18 months.
He said the consumers report didn't take into account discounts offered to customers with more than one car, home insurance policies with the same company or rewards for being a loyal customer.
The Ontario government, which pledged to reduce auto insurance rates when they were elected in 2003, also presented numbers in line with industry figures.
The average Ontarian paid $1,391 for insurance in 2004, with 2005 rates projected at $1,379, a finance ministry spokesman said yesterday.
Beyond the provincial differences, the consumers report found vast gaps between premiums paid in Ontario cities.
Hamilton car owners pay almost $600 less for insurance than some drivers in the Greater Toronto Area but more than those in Guelph, London, Ottawa, Windsor and 21/2 times more than drivers in Victoria, B.C.
Perhaps even more eye-popping is knowing that the same driver with one ticket and one accident can pay between $2,051 and $17,468 for insurance in Ontario.
The Ontario government released those numbers in its 2005 rate guide for insurance in February. It showed a 19-year-old driver with a clean record could pay anywhere from $5,750 to $15,551 and a 40-year-old with no accidents or tickets pays between $1,763 and $6,992.
Romanow says many companies charge huge rates for business they aren't really interested in having.
"Basically, the company is saying, 'Go away, we don't want your type of business.' Instead of knocking on your door and telling you to your face, they set these huge rates."
But some consumers are paying that premium, perhaps out of a misguided sense of loyalty to a particular company or the belief they can't do any better. She said everyone should compare their premiums every time their renewal comes up.
"Ontario is paying 45 per cent more than B.C. because people aren't getting the low rates. Consumers really need to wake up."
Yakabuski defended Ontario's free-market system, saying the province's claims payout is "enormously more generous" than those in British Columbia. The average claims payment, including injury and property damage, is close to $9,000 in Ontario and less than $2,400 in B.C., according to the bureau.
Yakabuski says Ontario's auto insurers paid out $1.5 billion in health-care costs, $3 billion in vehicle repairs and $1.6 billion defending people being sued.
Cran counters payouts are higher in Ontario because a $30,000 deductible on personal injuries wiped out any small claims, and Ontario drivers are "scared out of their tree about reporting fender-benders."
He says studies show a third of Ontario's car accidents aren't reported to insurance companies.
Yakabuski also said the availability of insurance has improved dramatically. In March 2004, there were more than 226,000 vehicles insured through Facility Association -- the last resort for drivers who can't find regular coverage.
Last month, that was down to 36,868.
"Premiums can drop from $5,000 a year to $1,700."
For a copy of the Consumer's Association report, see here:
Thanks to firstname.lastname@example.org 905-526-3408 with files from The Canadian Press
AVERAGE ANNUAL AUTO INSURANCE RATES BY CITY
North York $3,005
East York $2,867