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Marshall’s Report – Insurance in Ontario

A new report from the finance ministry written by David Marshall has some eye-opening numbers and recommendations for the auto insurance industry in Ontario. The auto insurance industry in Ontario has been unfair to citizens and victims of car accidents for many years, making it harder and more expensive to receive benefits. Ontario’s auto insurance industry has been labelled as one of the most ineffective despite having some of the most expensive premiums in the country.

The average annual insurance premium in Ontario was $1,458 per vehicle; 57% higher than the national average of $930. Aside from higher premiums, drivers suffer in regards to the time it takes to receive benefits. According David Marshall’s report, car accident injury victims have to wait anywhere from 1 to 2 years to receive any form of benefits, even for the simplest of claims. Many factors attribute to this dreadful time period, including insurance companies aiming to minimize benefits given out. Often times, insurance companies will spend more to higher lawyers than to pay out benefits to deserving victims.

Marshall’s report gives recommendations for the auto insurance industry in Ontario, many of which could have a negative impact on injured victims. A few recommendations are outlined below:

  • There is clear urgency to make the accident benefits system simple and accessible without the need for legal representation.
    • Banning or restricting advertising and referral fees, and restricting contingency fees in personal injury cases.
  • The regulator should monitor the overall use of legal representation in the accident benefits system to analyze why claimants are needing to resort to legal advice.
  • There should be no cash settlements in the accident benefits portion of the Ontario auto insurance system for those benefits specified in the legislation as being for medical and rehabilitation care.

Insurance companies for a long time have been able to operate however they’d like, (deny accident benefit claims), without repercussions. These recommendations would continue to allow such injustices, while inconveniencing the victims further. Banning legal fees on a contingency basis would cause accident victims to pay for legal support upfront, many of whom cannot afford such expenses. Preventing victims from seeking a lawyer’s help would benefit no one but the at-fault driver and insurance companies who do not wish to pay up on accident benefits.