are you covered? -
q. if i borrow a car from a family member or friend, am i covered?
a. if you borrow a car with permission and are involved in an accident, the accident will go on the record of the person who owns the policy on the borrowed car. if you're lending your car to someone, you're lending your insurance policy to that driver. think twice before you hand over the keys.
summer 2009 (printed -p.50)
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TORONTO STAR Article -
GTA drivers face 14% insurance hikes
By James Daw, Personal Finance Columnist
Published On Tue Oct 20 2009
Millions of Ontario drivers are about to be slammed with double-digit premium hikes, with the average Toronto-area driver likely to pay nearly 14 per cent more.
Ten insurers serving more than a quarter of Ontario drivers have just been cleared to raise their rates a second or third time in about 12 months.
Their policyholders will be hit with increases averaging between 11 and 19 per cent when the policies come up for renewal, joining drivers insured by several other companies that had already been cleared for double-digit increases. Another seven companies have been cleared for smaller increases in the latest round of approvals.
But these are only provincial averages, which do not represent what most GTA drivers can expect to pay.
Calculations by the Star show that Toronto-area policyholders of the 17 companies face an average increase of 14 per cent, while in the province as a whole drivers will see an increase of 9.1 per cent.
But some Toronto-area drivers – depending on the company they are with, their driving record and the neighbourhood they live in – face increases of 30 per cent or more.
"The big cost driver in Ontario, and even more so in the Greater Toronto Area, is accident benefits costs," said Leonard Sharman of Co-operators General Insurance Co.
"Things like assessments, medical rehabilitation, physiotherapy costs, etc., have been increasing pretty dramatically, and this is most pronounced in the GTA."
His company has been allowed two increases totalling 8.57 per cent since the middle of last year. But its GTA increases would be 11 and 14 per cent, said Sharman, warning there is more to come in March.
Don Forgeron, president of the Insurance Bureau of Canada, said "insurers are doing all that they have at their disposal (in the face of rising demands for treatment and compensation) – to pass those cost increases on to consumers.
"I guess we, like everybody else, are waiting with anticipation for an announcement by government. We think we have made a credible case for substantive reform, and we hope we have been heard."
Insurers complain the only means they have to stand up to what they see as excess requests for assessment and treatment of mainly minor sprain, strain and whiplash injuries is to order their own costly assessments.
While Finance Minister Dwight Duncan is expected to announce changes to auto insurance policies within days or weeks, it won't be this week.
A spokesperson says his fall update of the budget Thursday is his first priority.
The Financial Services Commission of Ontario said in its latest quarterly announcement it had cleared insurers serving a third of Ontario to raise rates an average of 6.2 per cent.
But that was just the latest rate change for the 17 insurers. When compounded with increases approved over 12 months, the increase will be 9.1 per cent as annual policies are renewed.
To come up with its estimate of 14 per cent in the GTA, the Star took that 9.1 per cent provincial figure and added the same amount extra that Co-operators revealed Monday its Toronto policyholders would pay.
The average premium per auto in the GTA was $1,682 last year. A 14 per cent increase would take the average to $1,917.
Insurers serving about 27 per cent of drivers have been granted double-digit province-wide increases. These include AXA Insurance (Canada) at 12.2 per cent, Kingsway General Insurance (recently renamed Jevco Insurance) at 21.2 per cent, State Farm Mutual Automobile Insurance at 12.5 per cent and Wawanesa Mutual Insurance Co. at 15.1 per cent.
Drivers with Pembridge Insurance Co. Ltd. will see rates rise 21 per cent in the GTA and 18 per cent in the rest of the province.
Meanwhile, drivers with a perfectly fine driving record are facing extra demands to keep their preferred insurance rates with Economical Mutual Insurance Co.
The company is notifying brokers that owners of old vehicles must update and have all drivers in their household sign applications for insurance, to ensure all the information on record is current. In addition, they must have their vehicles inspected.
Randy Carroll, chief executive of the Insurance Brokers Association of Ontario, said most brokers would prefer not to put their clients through the inconvenience.
But he said they are getting pressure from other insurers not to switch Economical clients to their companies, as the insurer for 6.2 per cent of Ontario drivers suffered the heaviest losses in the industry last year.
Noel Walpole, president of Economical, said his company would prefer not to require policyholders to complete an entirely new application form.
Unfortunately, regulators have taken weeks to approve a shorter, more efficient method of updating client information.
Andrew Wicken, general manager of InsuranceHotline.com, said he cannot promise drivers, who use his website to search for the lowest auto insurance premium, will find savings these days. [and they're not even the best rates!]
"But it is particularly important to shop the market when we see increases like this," he said.
"Consumers cannot control these increases, but they can control other things that affect their rates," Wicken said.
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SOS! October Update - Re: still waiting for estate payouts - can't drive the car until the insurance gets reinstated and the car desperately needs to be washed (it's gathering dust and is covered in cobwebs now, which is extremely embarassing considering the neighbourhood it's parked in) and the parking permit expires next month as well (need valid insurance to renew it, and the rates are going up... help!)
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