Maybe Ontario is ready for public auto insurance?

Ontario auto insurance rates are on the rise. Insurance companies are complaining they are losing money and that the cost of claims is out of control. The insurance industry is advocating benefit cuts which are being considered by the government. Tell me if you’ve heard this before?

A recent government reports indicates that over the past two decades the auto insurance system in Ontario has been under constant reform that has left the public with complicated and expensive system. Each set of reforms has included changes advocated by the insurance industry to control costs but within a few years they come back asking for further changes. So I couldn’t help notice an editorial in the Toronto Sun questioning whether it was time to consider public auto insurance in Ontario.

The provinces that have public auto insurance systems have stable costs and benefits and don’t require radical changes. Their benefits are as generous as those in Ontario although a number of public provincial systems don’t provide for lawsuits, which is probably one of the reasons we have a privately delivered system. Lawyers won’t support a system that doesn’t include lawsuits. The insurance industry reports that the average accident benefits claim is about $38,000. The annual report of Manitoba Public Insurance indicates that their average claims cost is only about $3,000. Something is not right here. How much should it cost to treat a whiplash injury?

I like the way the do it in Quebec. The government run insurance program provides coverage for bodily injuries and private insurance companies provide coverage to fix your car. I think it’s safe to say that insurers are better at fixing glass and tin than broken bodies. Maybe it is time to give public auto insurance a chance.