Insurance companies in Ontario should have regulatory support that would allow them to give consumers more choice. The provincial government should also adopt new rules for the tort system to reflect that fact that personal injury auto lawsuits “seldom involve complex issues of law,” according to a special advisor working with the finance minister.
In a new report titled Fair Benefits Fairly Delivered: A Review of the Auto Insurance System in Ontario, David Marshall says, “After protecting others through a minimum liability insurance, a sensible system of consumer choice whereby a person may consciously take less auto insurance and save money should be explored.”
Marshall became the advisor or auto insurance and pensions in February 2016. provide advice and recommendations to governing and regulatory bodies in an effort to reduce auto insurance costs in Ontario, while the role also involves him overseeing the roll out of the Ontario Retirement Pension Plan (ORPP).
In the report, Marshall says the accident benefits system works as a “safety net” but the government must decide to what extent it provides the safety net.
“Guaranteed safety nets work best when they are administered by a government agency, which is an administrative tribunal, with authority to interpret the governing legislation and set policy and practices,” Marshall wrote. “Private sector insurance companies work best when they can write policies with defined conditions and benefits. Ontario has devised a guaranteed safety net for victims of auto accidents and outsourced it to insurance.”
Marshall says Ontario should maintain a private-sector market where insurance companies write auto accident benefits and liability. It should not follow other provinces and have a public market or one that is mixed.
“Should the mandatory safety net cover just the most serious injuries?” Marshall wrote in Fair Benefits Fairly Delivered. “After all, coverage costs money. Should the government insist on coverage for catastrophic injuries and allow consumers to buy coverage for less serious injuries if they want to?”
He also points out that most drivers in the province has some kind of medical benefits from employers, and this is the first safety net. Auto insurance providers are the second line of payment if a driver is involved in a collision.
“For those drivers who already have workplace insurance, they are caught between two competing insurance companies with potentially different claims processes and criteria for accepting claims,” he wrote.
Marshall also called for a revision of the tort system:
“The current process for tort claims follows procedures in the court system developed over many years for all kinds of claims, some of which are highly complex,” Marshall wrote. “Auto insurance tort claims, while numerous (about 15,000 to 17,000 a year) are relatively straightforward. The issues in dispute recur frequently and seldom involve complex issues of law.”
However, “under the current system, the basic issue of parties exchanging relevant documents and information is highly inefficient,” Marshall wrote. “There is no prescribed set of documents that must be produced by each party. If one party refuses to offer certain documents, the other must make a motion to the court, often a lengthy process, to compel the party to produce the documents.”
“The tort system is confrontational, time-consuming, involves the cost of legal counsel and experts, and ties up negotiating time if settled out of court or court time if cases go to trial,” he wrote. “Moreover, using the court system to get injured parties what they deserve results in a significant leakage in the benefit they actually receive since the award they get is reduced by the need to pay expert witnesses and large fees to lawyers.”