Ontario lawmakers seek to end territory assessment for auto insurance

Published: October 16, 2018

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During Ontario’s provincial elections earlier this year, the major parties used auto insurance as a debate point. While the conservatives took power from the liberals, both sides were discussing ending insurers setting premiums based on drivers’ address.

Now, two separate bills have been created that would put an end to so-called territory assessments for auto insurance.

A private member’s bill introduced Monday by Tory legislator Parm Gill of Milton targets discriminatory pricing. Insurers use where a person lives as a major factor in deciding the price they will pay for coverage. Gill says drivers in Toronto pay more than other customers simply because of where they live.

“Ontario’s auto insurance rates are amongst the highest in Canada despite having some of the lowest levels of accidents and fatalities,” Gill said. “Our government is committed to ensuring fairness in rate setting and ending discriminatory practices.”

Critics of territory assessments argue the system is unfair. In some instances, a driver may pay hundreds of dollars more than another driver located just a street away, if there is a recognized (but invisible) divide between the two addresses according to insurers.

“This bill, if passed, will promote personal responsibility,” Gill said. He suggests a good driver in Milton should be awarded with good auto insurance premiums as they would anywhere else.

FSCO Requirements

Another similar bill was also introduced on Monday. NDP legislator Gurratan Singh offered a law that would require the Financial Services Commission of Ontario (FSCO) to refuse approval for pricing systems that do not deem the Greater Toronto Area as a single geographic location.

“Drivers in the Peel region and other parts of the GTA continue to arbitrarily pay significantly higher auto insurance rates than anywhere else in the province,” Singh said.

“It will make sure that insurance companies are not allowed to gouge people simply based on the neighbourhood they live in or the municipality that they live in,” the MPP said.

Carriers still say territory assessment is an effective way to determine auto insurance price. It is still “the most effective indicator of whether someone will have a claim and how much it will be,” said Joseph Carnevale, associate broker and director of sales for Brokers Trust Insurance Group Inc.