Ontario budget takes aim at car insurance costs

Published: April 24, 2015

Updated: July 24, 2018

Author: Callum Micucci



The Ontario Liberal government is taking steps to lower insurance costs for drivers in its 2015 budget, attempting to make good on its promise from two years ago.

In the government’s 2013 budget (when they were just a minority in the legislature), the province said it would bring rates down by 15 per cent by August of 2015. They’ve since only decreased rates by about half of that figure.

The new measures include a mandatory discount for drivers that install snow tires on their vehicle during the winter months (which some companies already offer), as well as stopping insurance companies from increasing premiums for minor at-fault accidents, such as those resulting in no injuries. However, it was unclear what the government defines as a minor accident, and they said they plan on consulting industry experts.

They also plan to lower the interest rate on monthly premium payments from three per cent to 1.3 per cent, lower the standard deductible on comprehensive coverage to $300 from $500, and combine medical and rehabilitation benefits with attendant care services as a single benefit (totalling $65,000, down from $80,000 separately), although drivers can still choose to increase these limits.

Furthermore, standard catastrophic accident limits will be lowered to $1 million (down from $2 million), but drivers can also still choose to increase this coverage if needed.

In a statement, the Insurance Bureau of Canada (IBC) said the changes are a “real win for consumers,” congratulating the government and welcoming its commitment to reforming the auto insurance industry in Ontario.

“It’s clear that the government recognized that the auto insurance product needed reforms to work better for consumers,” said Ralph Palumbo, Vice-President, Ontario, IBC. “These reforms will remove excessive costs and this will result ultimately in lower premiums for Ontario’s 9.4 million drivers. This shows, once again, the Ontario government’s leadership and commitment to consumers.”

However, Palumbo qualified his claim.

“Today’s budget does not resolve every problem with Ontario’s auto insurance system,” he said. “IBC and its member companies will continue to work with the government to help make sure Ontario drivers continue to come out on top.”