Ford government reveals 'transformative' auto insurance reforms, but doesn't say how much drivers will save

The Ford government has revealed a sweeping plan to reduce auto insurance rates, though it is not saying how much drivers should expect to save under the new rules.

The changes are aimed at increasing the range of plans available to drivers, making the claim process easier to navigate, and creating more competition between insurance providers.

Details of the Progressive Conservatives' "Putting Drivers First" plan were revealed in the government's first spring budget Thursday.

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"When it comes to driving, it is clear that Ontario's auto insurance is broken, and drivers deserve better," said Finance Minister Vic Fedeli in his speech to the legislature, where he called the plan "transformative."

Ontarians pay among the highest auto insurance premiums in Canada, with drivers in the GTAgenerally facing the highest rates.

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The previous Liberal government pledged to reduce auto insurance rates by 15 per cent over a two year period that was to end in 2015,but that goal was never realized.

Giving 'control back to drivers'

The proposed reforms are designed give drivers access to a wider range of plans, including more access to la carte-style coverage.

By loosening existing regulations, the PCs believe that insurance providers will be able to offer drivers more choices when it comes to coverage options. Doing so will give drivers more power to reduce their premiums through customized plans, the government argues.

"The proposed reforms will give control back to drivers," according to the 2019 budget document.

It has not yet been determined exactly which types of coverage drivers will be allowed to opt out of.

Insurance companies will also be allowed to offer new types of discounts to drivers for example, if a driver agrees to a credit check, or to claim benefits through an insurance company's "preferred providers" of auto repair or health care services.

While these new discounts and coverage options will be possible under the new rules, it does not appear that companies will be compelled to offer them.

Canada's first 'Driver Care Card'

The province has also revealed its plan to introduce what it calls a "Driver Care Card," which would act as a debit-style card for people making insurance claims.

Following an accident, the card would be loaded with money earmarked toward insurance benefits, such as rehabilitation and physical therapy.

Fedeli said the card will "streamline access to care by providing important information that will make the claims process easier to navigate."

The Tories say the new, centralized system will also make it easier to combat insurance fraud, since it will be easier to monitor which benefits are being claimed.

Ontario will also raise the default benefit limit for catastrophic injuries to $2 million from the current $1 million.

It has not yet been determined if Driver Care Card will be a physical card or electronic. Regardless, it would be the first system of its kind in Canada.

Increasing competition

The new auto insurance strategy is also designed to increase competition among insurance providers, giving companies new abilities to differentiate themselves from competitors.

That will include the allowance of new pricing structures and types of coverage that were not previously available. The budget document cites pay-as-you-go insurance as an example of an innovative business model it wants to encourage, though some companies already offer that type of coverage.

The Ford government also wants more insurance-related transactions to be made possible online, including payments and general communication.

Drivers will also be allowed to use electronic proof of insurance instead of the paper proof that is currently required.

The PC government is also pushing for an end to so-called "postal code discrimination," which allows insurance companies to charge higher rates based on a driver's home address. Legislation calling for this change has been proposed but not yet passed by the legislature.

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