FREQUENTLY ASKED
QUESTIONS
-
What does the
elimination of rating based on age, gender and marital status mean for young
drivers and seniors?
-
When will consumers
see a difference in their premiums as a result of the elimination of rating
based on age, gender and marital status?
-
If insurance
companies can no longer charge higher rates to young drivers, will the
premiums for everyone else go up to offset it?
-
Why is government
leaving it up to insurance companies to decide whether they will lower rates
by a further five per cent?
-
How can I find out
if my insurance company is applying these new reforms to my policy?
-
When will the five
per cent overall reduction take effect?
-
How do I know what
my rights are when it comes to dealing with insurance companies?
-
My insurance policy
was just renewed and my rates went up despite government's reforms. Why?
1. What does the elimination
of rating based on age, gender and marital status mean for young drivers and
seniors?
By not permitting insurance companies to rate drivers based on their age, young
drivers will see dramatic reductions in their insurance rates, as much as 46 per
cent in some cases. Seniors should see no change in their rates as companies are
still allowed to provide seniors discounts.
2. When will consumers see a difference in their premiums as
a result of the elimination of rating based on age, gender and marital status?
This reform will take effect Aug. 1, 2005. As of that date, insurance companies
must adjust the premiums of their policyholders to reflect this change, and
issue the appropriate refund or adjust their monthly premiums accordingly. This
will affect about 10,000 to 15,000 policyholders.
3. If insurance companies can no longer charge higher rates
to young drivers, will the premiums for everyone else go up to offset it?
Our legislation specifies that insurance companies can�t increase rates to
drivers over the age of 25 because of this measure. Insurance companies may be
granted a rate increase if they can actuarially justify it. However, we believe
the insurance industry has enough profit to absorb this decrease without having
to make up for it elsewhere, considering only five per cent of drivers are under
25.
4. Why is government leaving it up to insurance companies to
decide whether they will lower rates by a further five per cent?
The report prepared by the Public Utilities Board, which regulates insurance
rates in this province, indicates that rates can come down an average of five
per cent after taking into account the ending of age discrimination. We are
mandating that rates be reduced by a further five per cent, unless companies can
demonstrate to the Board that they can�t absorb it.
5. How can I find out if my insurance company is applying
these new reforms to my policy?
All consumers should check their renewal statements to see if their rates have
been reduced. If your premium hasn�t gone down, contact your insurance company
or broker and ask for an explanation. If you are still unsure, contact us at
729-4834.
6. When will the five per cent overall reduction take effect?
The five per cent rate reduction will take effect August 1, 2005, unless
companies can actuarially justify to the Public Utilities Board that they can�t
reduce their rates by that amount. Once your policy is up for renewal, your
insurance company will apply the reduction towards your new policy, or issue a
refund at that time. This provides savings to consumers on their current policy
without causing undue administrative hardship to the insurance industry in
processing relatively small refunds.
7. How do I know what my rights are when it comes to dealing
with insurance companies?
Consumers should contact their insurance company or broker to answer any
questions they have, and contact the department at 729-4834 with any concerns or
complaints. We also have a series of brochures that fully explain the new
reforms and what people should know when purchasing insurance or making a claim,
as well as their rights. These can be found on the web site, or by calling the
department.
8. My insurance policy was just renewed and my rates went up
despite government's reforms. Why?
Rates could go up for any number of reasons, such as an accident, driving
convictions, a new driver being added to the policy, loss of a discount etc.
Also, your company may have been approved for a rate increase from the Public
Utilities Board after justifying it on an individual company basis. We always
advise consumers to shop around to get the best policy for their circumstances.
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