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CBC: Auto Insurance One Year Later
The CBC Radio Show “Ontario Today” recently covered the auto insurance reforms that went into play one year ago,
One year after changes to auto insurance in this province, who’s better off?
Hear from a doctor who says insurance companies are turning almost everything down; a lawyer who says there is a lot less money for treatment if you’re in a car crash; and an insurance industry spokesperson who says you will be taken care of if you’re hurt.
The changes continue to be highly contentious, with insurers saying they were desperately needed, and many clients and assessment centres saying the are criteria were unfair and are hurting people that genuinely need care. I detailed many of these changes here on Slaw.
In case you are new to this subject, let me tell you how we got to this messy junction.
Prior to the last reform which took place in Sept 2010, insurers claimed that their profits were too low. This of course was during the hight of the last recession. Turns out that while every other industry has to work hard to get itself out of the recession in one piece, all that the Ontario insurance industry needs to do is simply cry poor to the government and threaten to raise premiums in the year or two leading up to the election. Very unsurprisingly the Liberal government capitulated and agreed to the most dramatic and draconian overhaul to our accident benefit system thereby slashing benefits by over 70% and leaving us (contrary to what the insurers claim) with the second poorest benefit system in Canada. It leaves drivers completely unprotected.
Well…you may say that this was an acceptable sacrifice required to bring rates down, except the exact opposite happened – premiums post Sept 2010 continue to rise at double the inflation rates. Insurers find themselves in the most envious of positions: they successfully slashed over a billion dollars from their cost base and are allowed by the Liberal government to raise premiums. Their profits are skyrocketing and they are publicly crediting the last reform for their achievements. Now, if there was only a way to continue and milk this envious situation” they must think…”of course!” they say, “lets continue to complain but this time we will blame fraud…the one thing that is impossible to permanently fix…this will be our license to raise premiums in perpetuity”. Of course there are a few problems with their story that few challenge: 1) they claim that out of $9 billion of premiums collected in Ontario every year, $1.3 goes to fraud – if this was true and 15% of their revenue was attributed to fraud they would have gone under a long time ago. 2) This $1.3 billion figures has been thrown around by the insurance industry since 1992 and no one can explain where it comes from – why? because its made up. 3) If fraud was the problem all along – why didn’t the Liberals do the right thing and addressed the fraud issue before imposing a collective punishment on every Ontario driver by slashing benefits? 4) When the government fixes the “fraud” problem will they reinstate our benefits – while its only fair my money is on “No”. 5) There are 3 provinces in Canada with unlimited Medical-Rehabilitation benefit. Is it now better to defraud those systems and if so why are we not hearing anything about it?
The Liberal government which is supposed to represent us, the voters and consumers, can’t answer these questions. They are also not commenting on the endless problems that this new reform introduced, such as:
1. Victims with serious but non-catastrophic injuries are running out of money in less than a year.
2. Insurers decline rate of application for treatment has skyrocketed to 1 in every 2 treatment plans submitted. Why you ask? Because the government empowered insurance adjusters without any prior medical training to rule on whether a treatment course recommended by a healthcare provider is necessary. Prior to the reform insurers had to get a second opinion from another healthcare provider.
3. Victims living in remote areas and those with Catastrophic injuries can’t get an assessment done because of the new cap on assessment.
4. Our minor injury cap is the lowest in Canada and among the lowest in the US.
If this wasn’t enough guess what’s on the horizon – a reform around classification of who is considered catastrophically injured which will see a significant reduction in the number of victims who can receive a higher benefit amount due to the overwhelming severity of their injuries. Oh yeah…you know who came up with the new and reduced classification rules? It was an expert panel appointed by FSCO (the insurer regulator) and the Liberal government. The best part is that this expert panel had 5 of its 8 members with a declared conflict of interest in favour of the Insurers. Perhaps its no wonder that the conclusions drawn by this panel are they way they are.
At the conclusion I ask one simple question: Why does our government choose to protect the insurance companies at their every whim instead of protecting us – the voters, the drivers and the victims?
If you don’t know the answer perhaps you should ask our Premier or Finance Minister. Lets see if they can provide you with an answer that will satisfy you.
The only ones who have benefited from this are the insurance companies. Plain and simple. And I have insider information from an insurance Exec that the main thing they want to do is slash their own adjusters’ jobs. Yet, you have some adjusters who are so stupid that they fight to save dollars for the very company that wants to slash their jobs. They fail to see the big picture.
This is the underbelly of the giant insurance industry exposed, the never-ending greed that leads to the story of fictitious losses that are supposedly pushing up the premiums. I imagine that very few people would buy this industry’s product now that we know that the yearly premium for many is more than what you will be able to collect if you are injured. Our provincial government has essentially OKed a raid on our OHIP, McGinty and Liberals are waving in the industry to collectively bankrupt the OHIP system all while leaving injured Ontarians without any resources at a time of critical need. It’s almost inconceivable but the progression over the last two decades of stealing from the consumer to line the pockets of the greedy insurers just doesn’t seem to be on our government’s radar.
Simple changes:
1 – Stop legislating Ontarians to buy an inferior product from an industry that displays no incentive to live up to the letter of their contracts but rather exhibits an attitude of profit before people at all costs. Very creatively, now the adjuster can do all denials at far less cost and over the phone.
2 – Lets get the consumer and the accident victims real representation on these task forces and panels at FSCO – there is a total lack of advocacy for injured Ontarians, apparently they are expected to advocate for themselves somehow. Not if the insurers have anything to do with it, all resources, full ahead – here comes the MIG, that will keep claimants busy just trying to survive.
We need to individually lobby our Liberal government to step up, cc to every guilty party who has let this happen, Minister of Health is at the top of my list. And they wonder why people are protesting?
Most of Ontario’s recent auto insurance legislation has been driven by the auto insurance lobby’s assertion that out-of-control fraud is destroying the financial health of the insurers. The politicos happily accept this lobbyist assertion as if it were gospel without even the slightest effort to confirm the fraud loss estimate – currently sitting at $1.3 billion per year. Perhaps worse, the mainstream press, but for a handfull of reporters, have done the same. Not long ago the Globe and Mail carried an “investigative” column stating that Ontario auto insurers lost $1.3 billion to fraud last year and called auto insurance fraud a growing enterprise in Ontario. This was followed up by a similar column in the Toronto Star stating that GTA treatment providers bilked Ontario auto insurers out of $1.3 billion last year. Here’s the thing: back in 2000 the Hamilton Spectator investigated the auto insurance lobby’s assertions on fraud loss (“fraud squad under fire”)and pointed out that though the lobbyists kept saying fraud was sky-rocketing, the same $1.3 billion fraud loss estimate was trotted out from 1992 until 2000. How can that be? That now, in 2011, the $1.3 billion fraud loss figure is still being trotted out and used to guide auto insurance legislation in Ontario is truly amazing. In 2000, when the Spectator columnist asked the insurance lobbyists how it can be that auto insurance fraud (in all it many forms) is perpetually on the increase despite Statistics Cananda crime rate dropping during the same period (including for auto theft) the response was “you make a very good point”. This was followed by an admission that the $1.3 billion fraud loss estimate was/is merely a “rule of thumb” – the origins of which nobody seems to know. Currently, in the context of discourse about Harper’s “build more prisons and they will come” approach to crime, we keep hearing that Statistics Canada shows most types of crime continue to decline. And yet nobody points that out when the Ontario insurance lobby issues endless press releases stating that auto insurance crime rocketed to $1.3 billion last year – which then gets transformed from spin to factual “news” in the Star and the Globe. How is this possible? How can auto insurance crime escalate from 1992 till today (nearly two decades) yet the fraud loss estimate still sits at $1.3 billion per year? And how is it that auto insurance crimes forever sky-rocket while Statistics Canada shows crime rates steadily dropping? And given most of the Ontario motorists who are perpetrating this alleged $1.3 billion worth of auto insurance fraud every year got bank loans for their cars – shouldn’t we be hearing the banks telling us that their book of Ontario car loans is suffering from off-the-charts fraudulent failure to repay? Is the fraud gene Ontario motorists carry only activated in the insurance context? If sense is to be made of the lobbyists’ auto insurance fraud discourse – I’d sure like to hear how.