Parties seeking election votes by promising to cut territory assessments for auto insurance

Published: May 25, 2018

Updated: July 24, 2018

Author: Luke Jones



Ontario is preparing for its provincial election on June 7, and auto insurance is one of the key issues that will influence the voting public. Indeed, the party with members promising the end of territorial ratings in auto insurance is likely to find the most success next month.

However, this is a campaign promise that will not sit well with property and casualty insurance companies in Ontario. Many carriers argue territory 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.

Carnevale also serves as the directory of Territory 10 (taking in the Metropolitan Toronto and York regions) in the Insurance Brokers Association of Ontario (IBAO). The current provincial Liberal government has promised to “eliminate geographic discrimination in auto insurance.”

It’s a running promise that is likely to garner plenty of support, almost ignoring the fact the Liberals have broken campaign promises regarding auto insurance before. In 2013 the party pledged to reduce average premiums by 15% before August 2015. That self-imposed deadline passed with only incremental improvements and since auto insurance rates have returned to growth in Ontario.

The Liberals were burned by the false promise, with Premier Kathleen Wynne later admitting it was a “stretch goal” disguised as a campaign pledge. However, the party is attempting to woo voters again with auto insurance as a focus. This time, rivals are also making similar pledges, with the New Democratic Party also promising to end territorial ratings.

Additionally, the Progressive Conservatives have been running on a similar promise for some time, saying it would end postal code factoring in assessing auto insurance rates.

“Ironically insurance companies tell us that … where that car resides has the biggest impact on their ability to forecast whether or not there will be claims and how much those claims will be for,” said Carnevale.

“Just look at the 401,” he said of the Greater Toronto Area. “The traffic is an indication of how many cars are on the road. Clearly anyone can see that if you are in an area where you have that many cars, then the likelihood of accidents is far greater than areas where you don’t have that many cars.”