Falling auto-insurance rates have Ontario poised to cut premiums in 2015

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Ontario's auto-insurance rates have dropped more than 4.6 per cent in the past five months, and the government says it is on pace to cut premiums by 15 per cent by August of 2015.

The numbers, released Wednesday, are the first concrete sign the Liberals' move to drive down rates – which they agreed to do to win the support of the New Democrats for this year's budget – is bearing fruit.

The rate reduction is an average, meaning some drivers will see greater cuts while others will receive smaller ones.

"Our government is working hard to ensure a fair and affordable auto insurance system for Ontario's nine million drivers," Finance Minister Charles Sousa said in a statement. "The average decline in rate approvals since August is proof that our Cost and Rate Reduction Strategy is working."

The industry said the number showed it was complying with the government's orders to give consumers a break.

"Insurance companies are cutting rates and offering discounts to good, responsible drivers. That's the direction we want rates to go," said Ralph Palumbo, vice-president (Ontario) at the Insurance Bureau of Canada.

But the rate cuts do not go far enough for the NDP, who complained that, because the number is an average, some drivers are still seeing increases.

"What I'm hearing from folks is that it's coming up short in terms of the reduction," NDP Leader Andrea Horwath said. "I'm hearing informally from folks that they're seeing rates go in the opposite direction."

She argued that rates should be cut by 15 per cent a year earlier than under the current Liberal plan.

The NDP pushed for such a target during budget negotiations with the Liberals earlier this year. Ultimately, however, they agreed to support the budget without a time frame from the Liberals on how long the reductions would take.

Last summer, Mr. Sousa unveiled the two-year plan, which gives the Superintendent of Financial Services additional powers to order companies to cut premiums.

The government is expected to announce further measures in the coming months to crack down on insurance fraud. These will include a new framework for arbitrating settlements between accident victims and insurance companies more quickly and a plan to better supervise medical clinics. These moves are designed to reduce costs for insurance companies, with the savings passed on to consumers.