(Toronto Ontario) The Insurance Brokers Association of Ontario (IBAO) remains deeply involved on the issue of auto insurance and bringing meaningful reforms to vehicle owners. There is universal recognition that the current status of the Ontario auto product is causing growing concern for Ontarians. IBAO applauds the current Ontario Government for their desire to address the challenges of the existing auto insurance product.
Currently, brokers are seeing Ontario drivers become frustrated, as they have seen their insurance premiums account for a larger portion of their household budgets.
IBAO believes that sustainable relief will come if the inefficiencies outlined by the Advisory Group behind the Blueprint for Putting Drivers First are executed. While the use of credit scoring could help insurance companies better measure an insured’s risk exposure, implementing this practice is not one of the priority solutions identified by the Advisory Group. To help resolve the pressure on auto insurance pricing, there are more effective solutions that will lead to better results that better protect all Ontario consumers.
Given the nature of the Ontario Auto product being a compulsory purchase for drivers, the Ontario Government needs to ensure the product is both accessible and affordable. With the use of credit scoring on the Auto product, those consumers who are most vulnerable in society could become further disadvantaged. Using a consumer’s credit score to determine an auto insurance rate could negatively impact the availability and price offered to those who can least afford insurance in the first place with potential low or no credit scores: retired seniors, newcomers to Canada, the unemployed, single income families and small business owners using lines of credit.
IBAO urges decision makers to consider the broader implications before permitting the use of this rating variable in order to ensure the necessary protections are in place to protect the most vulnerable. If the goal is to reduce the cost of auto insurance premiums in Ontario, IBAO strongly supports working towards changes that will benefit all consumers.