Ontario proposes more optional coverages

Oct. 28, 2024 — A NEW proposal by the Ontario government to make almost all auto insurance accident insurance coverages optional is causing some concern.

Enrico Mastrangeli, distribution VP at Commonwell Mutual, warned at the recent Insurance Brokers Association of Ontario convention that while the province’s move is aimed at lowering premiums, it could unintentionally increase costs and create complexities for brokers.

“Brokers will need to discuss collateral benefits with clients, which could change if a client switches jobs or loses benefits,” he said during the event in Toronto, which had record attendance of more than 3,000 delegates.

“This creates challenges for ensuring clients have the right coverage long-term.”

Mr. Mastrangeli said there could also be unintended consequences for injured passengers or pedestrians who might rely on coverage from the vehicle — which may not always be the best fit.

And he said changes making the insurance policy the primary payer instead of collateral benefits may lead to higher premiums and increased tort challenges.

“While I appreciate the intention to offer choice, I’m not convinced it’s the right choice.

“I hope these changes will be reconsidered.”

The Ontario Finance Ministry said its proposed amendments will enable greater consumer choice and allow drivers to decide what coverages are important to them and their families.

It said this could provide drivers with an opportunity to lower their auto insurance premiums by taking advantage of a range of coverage options based on their needs.

Auto insurance accident benefit coverage for medical, rehabilitation and attendant care benefits would continue to be mandatory.

Travelers Canada claims VP Gavin Mascarenhas said during the IBAO convention that there is an opportunity for brokers in the proposed reforms.

“We’re optimistic about it,” he said.

“It will be instrumental for consumers in Ontario to consult with a qualified professional when purchasing insurance, given the impact on their coverage.”

Mr. Mascarenhas said this approach offers a way for those seeking more affordable insurance to choose the exact coverage they need.

“If done correctly, the responsibility will shift equally to both the consumer and the broker,” he said.

“This could help achieve the goal of providing more choice and potentially lower premiums.

“But, as (Commonwell’s Mr. Mastrangeli) mentioned, there are still many unknowns, and it’s too early to predict the full outcome.”

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