Your auto insurance policy up for renewal. Sit down before you open up the policy for reviewing. Same premium, yes, but less coverage. The provincial govt. is ripping us all off !
A study by Dr. Fred Lazar and Dr. Eli Prisman, from the York University Schulich School of Business, has concluded that Ontario consumers have overpaid auto insurance by between $3 and $4 billion. The ONT govt. continues to rip off the consumers in the province.
Here are a few excerpts from the Lazar-Prisman study. Prepare yourself for the sticker shock.
For the full report, REPORT
First, understand that if you accept your premiums as they currently are, you will be receiving significantly less coverage/benefits.
Next, the premium overpayments have not gone to accident victims or to lower premiums. Instead they have gone straight to the insurance companies coffers.
In 2013, the Liberal government promised to bring auto insurance rates down by 15 percent by August 2015. Drs. Lazar and Prisman concluded that the 12 percent benchmark Return On Equity is much too high given the low interest rates that have prevailed for the past several years. They concluded that based on the economic evidence, a more realistic and appropriate ROE benchmark is in the range of 5.8 percent. In response, Financial Services Commission of Ontario reduced the benchmark to 11 per cent.
Drs. Lazar and Prisman conclude that as result of the inflated ROE, auto insurance companies in Ontario have had a free ride during part of the past 20 years. In 2013, if the ROE was 5.8 percent, premiums could have been reduced by $685 million.
Auto insurance premiums could reasonably be reduced by at least $840 million, or 7.9 percent based on 2013 data. Most importantly, this reduction can be done without further reducing auto insurance benefits!
We all need to speak out against the misleading information being fed to us by the insurance industry and its paid lobbyists. This report prepared by prominent business professors Dr. Fred Lazar and Dr. Eli Prisman reveals the truth behind the numbers. The auto insurance business in Ontario is very profitable. Reasonable premium reductions should occur without any further erosion to accident benefits.
If this bothers you as much as it bothers me, consider contacting your local MPP and tell her/him about this report and how insurance companies have not been telling us the truth about the profits they have been earning over the past 12 years in Ontario.
