Ontario’s proposed budget changes on auto insurance coverage could increase premiums

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Insurers say the Ontario budget’s proposed changes to auto insurance may increase drivers’ premiums, but health workers say the moves are necessary to ensure car-crash victims have proper access to care.

The Ontario government proposed in Tuesday’s budget to make a number of changes it said would modernize the auto-insurance system by increasing consumer choice, improving access to services and providing for a reduction in premiums.

For example, one significant change for consumers would be to allow them to opt out of a wider range of policy options, which the government said would result in lower premiums. Medical, rehabilitation and attendant care benefits would remain mandatory.

As well, the budget committed to spending an additional $49-million on combatting auto theft, which has been a major factor behind rising costs for insurers. Équité Association, a non-profit that assists in fraud investigations, recently estimated that car thefts in Ontario increased 48 per cent between 2021 and 2023.

The Insurance Bureau of Canada expressed support for the proposed changes in general, particularly the funds to fight crime.

“Across Ontario, auto theft has reached a crisis level,” said Amanda Dean, IBC’s vice-president of Ontario and Atlantic regions, in a statement. “This funding is a meaningful and positive step toward better protecting Ontarians and their families.”

Other parts of the package, however, got a more measured response.

One significant change for consumers would see auto insurers become the first payers for health services to treat crash injuries. Previously, patients had to exhaust their coverage under group-benefits plans first, potentially leaving them with little left over to treat other conditions.

For health care providers, an important promise was Ontario’s direction to the auto insurance industry regulator, Financial Services Regulatory Authority of Ontario, to review provincial fee guidelines, which have remained unchanged for a decade.

The Ontario Rehab Alliance, a group that represents professionals such as physiotherapists and nurses, said it supported both of these measures – the first-payer change and the fee review – because they would improve how much care a patient can access.

The ORA has said many health care providers have felt financial strain from treating crash victims because they earn far less treating them than other kinds of patients. Some professionals have chosen not to take patients injured in car accidents or have found it difficult to recruit staff to do this.

“For those providers who have just been hanging on by their fingernails because of their devotion to their clients, their commitment to the work, it will really be a ray of hope to think that we’ll get our rates adjusted some time in the not-too-distant future,” said Laurie Davis, ORA executive director.

IBC said it expected that making auto insurers pay first on claims would ultimately lead to insurers increasing premiums.

On the issue of health care provider fees, the association said it supported the review, but also said it could cause an increase in how much drivers pay.

“As for the proposed fee assessment review, our position is that rates paid to health care providers should ultimately reflect the price paid for those same services by other insurance plans,” IBC spokesperson Brett Weltman said in an e-mail. “Any changes, higher or lower, are ultimately reflected in premiums.”

The budget does not include a timeline on when the insurance-related measures will be enacted. FSRA said it would hold consultations before making any changes.

“When FSRA formally reviews the relevant guidelines, we will obtain input from all stakeholders and consider how to make the system better and more efficient for the benefit of Ontario’s consumers and injured claimants,” spokesperson Ashley Legassic said.