AUTO INSURANCE:

Auto insurance rates continue to increase in Ontario (20% in two years), due mostly to government interference with the system. Drivers now pay high premiums for a jumble of compensation rules which will never fully compensate for loss. And government has forbidden insurers from applying actuarial tables in setting rates where immature, high risk drivers are concerned. The result is higher premiums for those least likely to cause accidents.

The Liberals and the Progressive Conservatives are saying they'll cut rate increases by taking away the rights of the injured to sue for pain, suffering and income replacement. With a proposed limit of $600 a week for wage replacement, accident victims would now be victimised by their government.

Libertarians believe government legislation has ruined the auto insurance market and removed competition from it. The only thing worse they could do is take it over completely. Then your insurance will end at the border just like government run health care.

A free market in auto insurance will give Ontarians affordable protection that is responsive to their needs.

NOTES:

• --In the first quarter of 1995, rate increases averaged 15.2% No doubt due to the fact that accident benefits were increased by the government in 1994 although the right to sue for economic loss was eliminated by bill 164. The government estimated the changes would only amount to an increase of 5%.
• --The government took control of the auto insurance business due to increasing premium costs. The increases were due to courts awarding damages based on the ability to pay by the driver found at fault. It was becoming an income redistribution scheme rather than a method of restitution for losses incurred.
• --The Liberals introduced no-fault insurance to hold rate increases and prevented anyone suing for more than the regulations allowed. This meant a doctor who was unable to work due to an accident would end up with the same weekly income award as a mechanic.
• --The NDP decided to make insurance rates "fairer" by ignoring years of rating experience by the industry. Male drivers under age 25 have the worst accident record but under the NDP changes they pay no more in premiums than female drivers in the same category who have far fewer accidents. They also increased the benefit levels which has resulted in higher rates.

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