Seeking to avoid premium increases Advantage With Cuts, Auto insurance rates to increase Nevertheless, the future of the government's decision

TORONTO, July 16 /CNW/ - Auto insurers in Ontario have been pressing Finance Minister Dwight Duncan for financial relief in the form of reduced benefits for accident victims, warning that premiums would rise dramatically if they didn't get what they wanted.

Now the insurers have decided to jack rates anyway, even though the provincial government has yet to decide on a proposal that would reduce their claims costs by millions of dollars a year by lowering the cap on medical and rehabilitation benefits.

According to media reports, the industry says the double-digit premium increases are necessary because of investment losses and the increased demands on insurers to pay more for medical and rehabilitation services for victims.

"It would seem that the insurance companies have decided not to wait for Minister Duncan's decision," says Colleen Boyce, a spokesperson for the Alliance of Community Medical and Rehabilitation Providers.

"There can be no argument now for also lowering benefits from $100,000 to $25,000, and we would expect the provincial government to reject that proposal."

While insurance companies lost a reported $390 million on their Ontario auto businesses last year, they made $2.8 billion on their overall property and casualty operations. As well, the industry had a return on equity of more than 7 per cent.

"It should be a slam-dunk decision for Minister Duncan now. The insurance industry shouldn't be allowed to have its cake and eat it too. Insurers shouldn't be allowed to boost rates and slash benefits," notes Boyce. "There's no question that the insurance system needs reforming, but these reforms should not be made by penalizing accident victims."

The Alliance estimates that there are some 12,000 people seriously injured in auto accidents in Ontario every year, and that most of these individuals need the $100,000 in benefits in order to return to as normal a life as possible.

"We're not as concerned about those with minor injuries as the reduced cap wouldn't affect them as much. But for those who are seriously hurt, they'll run out of benefits at $25,000 long before they get better."

As these victims quickly exhaust their benefits under the proposed new regime, they would be thrown onto the public health system where either the services they need are unavailable or the wait times are so long that timely intervention becomes impossible.

"The insurance industry has made the Finance Minister's decision for him. They've opted for premium hikes. Now it's Minister Duncan's turn to say 'no' to allowing the insurance companies to off-load accident victims onto OHIP," says Boyce.

The Alliance of Community Medical & Rehabilitation Providers is a coalition of 43 organizations in Ontario providing direct clinical services to victims of motor vehicle accidents and employing physiotherapists, occupational therapists, speech language pathologists, chiropractors, social workers, psychologists, case managers and family physicians.