Democracy Gone Astray

Democracy, being a human construct, needs to be thought of as directionality rather than an object. As such, to understand it requires not so much a description of existing structures and/or other related phenomena but a declaration of intentionality.
This blog aims at creating labeled lists of published infringements of such intentionality, of points in time where democracy strays from its intended directionality. In addition to outright infringements, this blog also collects important contemporary information and/or discussions that impact our socio-political landscape.

All the posts here were published in the electronic media – main-stream as well as fringe, and maintain links to the original texts.

[NOTE: Due to changes I haven't caught on time in the blogging software, all of the 'Original Article' links were nullified between September 11, 2012 and December 11, 2012. My apologies.]

Friday, August 12, 2011

Toronto drivers face hefty insurance hikes

Ashkan Alavi wants to know why he’s paying more money for less insurance.

The 44-year-old physicist expects to pay just over $1,500 this year in auto insurance premiums, up from nearly $1,150 last year.

Alavi has written to his Richmond Hill MPP to find out why his premium has risen 30 per cent from last year — despite auto insurance reforms that were meant to stabilize rates.

“I am a good driver, a clean driver. I have never made a claim in 18 years of driving,” Alavi said.

“So what did the government do? What was the reform for, if my premiums are not coming down?” Alavi said.

Ontario drivers saw big changes in their auto insurance last fall, including a reduction in benefits for some injuries.

The insurance industry said the changes would give consumers more choice in their coverage and that they were necessary to help root fraud out of the system and stabilize premiums.

But critics argue that “more choice” was a red herring, that consumers would end up paying higher premiums for less coverage, and that the reforms would have little impact on Ontario insurance rates, which remain among the highest in the country.

NDP justice critic Peter Kormos, MPP for Welland points out that it’s still too early to gauge the impact of the reform, but he’s skeptical of insurance company claims that fraud is driving up costs for all drivers.

“I find the auto insurance industry to be incredibly dishonest and far from transparent and forthright when they talk about premiums and service for injured parties,” Kormos said in an interview.

An investigative report by the Toronto Star, published in July, described medical clinics named in lawsuits, and quoted doctors named in the lawsuits as having had their identities stolen to be used to submit bogus medical invoices for the assessment and treatments the claimed to have performed on people involved in car crashes.

Since then, some of the country’s biggest auto insurers filed a lawsuit against a group of Toronto-area medical rehab clinics that they allege submitted almost 600 phoney claims totalling about $1.4 million.

In late July, the Ontario government announced the creation of a new Auto Insurance Anti-Fraud Task Force that will make its first set of recommendations to combat fraud this fall.

“Fraud leads to higher auto insurance premiums. Our government continues to keep an eye on rates and premiums and we have made changes to the auto insurance system to stabilize rates for drivers and protect the rights of accident victims,” Finance minister Dwight Duncan said.

Rate increases are regulated by the Financial Services Commission of Ontario. The average of all approved changes, across all companies, was 1 per cent in the spring of this year, according to the commission.

The average increase in 2010 was 4 per cent.

Other industry figures also show a stabilization in rates.

Ontario auto insurance rates increased 6.4 per cent from April to June of 2011, compared to the year-earlier period.

Rates went up by 6.7 per cent in the first three months of 2011, and by 9.5 per cent in the fourth quarter of 2010, according to Kanetix, an online insurance quote comparison service.

But those are averages.

Many consumers, such as Alavi and thousands of other drivers in the Greater Toronto Area in particular, are still paying some of the highest rates in the country.

“The average rate means nothing,” Kormos said. “Good drivers in Ontario subsidize bad drivers at a far greater rate than they do in public systems.”

Prior to 1990, Ontario had an at-fault insurance system. That meant if you got into a car accident, you hired a lawyer and needed to sue in order to receive benefits.

Under today’s no-fault system, the province mandates the same auto insurance policy for all drivers. In other provinces, such as British Columbia, Manitoba, and Saskatchewan, the government also administers the system. In Ontario, the government mandates policy and private insurance companies collect premiums and pay out benefits.

In the previous round of reforms, the insurance industry insisted on a system of assessments for accident victims.

But those costs spiralled out of control.

For every $1 spent on medical treatment, the insurers pay another 60 cents in assessments.

Under the changes brought in last fall, standard auto insurance policies now pay up to $50,000 in medical and rehabilitation benefits, including assessment costs, for injuries that are not catastrophic. The new limit is $36,000 for attendant care benefits.

That’s half the previous level of benefits.

The maximum coverage on catastrophic injuries remained unchanged at $1 million.

For minor injuries, medical and rehabilitation benefits are capped at $3,500.

Consumers have the option of buying additional benefits.

Origin
Source: Toronto Star - Moneyville 

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