Increased Car Accidents Lead To Growing Auto Personal Loss Ratio
Every day, insurance companies pay millions to Canadians for injuries and property damages. Every Ontario driver is required by law to have car insurance, so many of these settlements involve car insurance policies. With an increase in car accidents and rising repair costs, Canadian auto insurers are seeing an increase in auto personal loss ratio for the fourth year in a row. A loss ratio is the ratio of claims paid by an insurer to the premiums earned. The recently released figures show that the loss ratio dropped to 89.6% in 2016, down 1.5 points from 2015. Canadian insurers wrote $41.1 billion in net premiums through out 2016, up 4.1% from the following year. These numbers do not include results from either the Insurance Corporation of British Columbia or the Lloyd’s market.In 2013, Ontario passed a law in an attempt to reduce average authorized rates by 15%. While not wholly successful, the Automobile Insurance Rate Stabilization Act did manage to decrease the average by 8.3% over three years. During this time, car accidents have increased due to distracted driving, and auto repairs have become more expensive. The Ontario government is seeking to reduce fraud and explore cost-cutting opportunities to try to counterbalance this trend, paying particular attention to the towing industry and collision repairs. Car accidents can seriously alter or even end a life, so an increase in these numbers is bad news for insurers. Ontario residents should know how to communicate with insurance companies and understand the related provincial laws. A personal injury lawyer can help people understand their legal options in the case of an accident.
Originally posted on: September 12, 2017