Are you tired of paying high auto insurance premiums? If you answered yes to this question and live in Ontario, you may be glad to hear that the Financial Services Commission of Ontario (FSCO) is enacting auto insurance reform that will take effect for policies renewing on or after June 1, 2016. This means that your auto insurance premiums may be reduced and some of your benefits could be adjusted.
Why the Change?
FSCO has recognized that drivers are often paying for insurance coverage that does not match their needs, and the regulatory agency is taking action in an effort to make auto insurance premiums more affordable. Drivers will now have more insurance options to select from and have the opportunity to select a plan that better fits their situation.
What are the Adjustments?
Although your insurance premium may be reduced, it does not mean that your coverage will stay the same. The auto insurance reform will merge two non-catastrophic injury categories (attendant care and medical/rehabilitation) into one and it will have default coverage of $65,000. Additionally, catastrophic coverage will drop to $1 million for each of these categories.
Other changes include a drop in the maximum interest rate that insurers can charge for one year policies (3% to 1.3%), a reduction in the waiting period for auto insurance benefits if you are unemployed (six months to four weeks), and a change that prevents insurance companies from using minor accidents against you if they fall within a specific criteria. A complete list of changes can be viewed on the FSCO website.
How Should You Proceed?
If you are wondering how these changes will affect you directly, you are not alone. Many Ontarians have been concerned on how this auto insurance reform will change their coverage.
Carlos Coutinho, the Chief Operating Officer of the Canadian Automobile Association of South Central Ontario (CAA SCO), recently offered sound advice to motorists. He encourages “drivers to review [their policies] and understand [their] coverage needs” and to “talk to [their] insurance advisor about the changes and purchase increased benefits if necessary.” It is important to know what you are paying for and to have the coverage that you feel comfortable with.
The Final Result
While auto insurance reform may seem concerning now, it has the potential to benefit the drivers of Ontario for years to come. Vehicle owners in the Province will now have a better opportunity to pay for the coverage that they desire to have, instead of being forced into an insurance package that they might not need. FSCO's auto insurance reform has the potential to save motorists a significant amount of money over a long period of time.
Getting on the Road
If you need a vehicle, the experts at Canada Auto Loan may be able to help. Begin the process by applying online and we will match you with a nearby dealership. This dealership will give you the best shot at driving away in a vehicle, regardless of your credit. We have helped countless individuals in the car buying process and we may be able to do the same for you.