Ontario drivers pay the highest insurance premiums compared to other drivers in Canada, the province’s auditor general has determined.
The primary reason behind the costly premiums is the high claim payment levels, with the average injury claim standing at around $56,000—five times the average in other provinces, according to the annual report published by Ontario Auditor General Jim McCarter.
McCarter said another reason for the high cost in Ontario is that the coverage offered provides one of the most comprehensive and highest benefits in Canada.
The government has begun taking action to reduce the high costs, McCarter said, but needs to overcome a number of challenges to achieve that goal, including addressing the lack of adequate measures to reduce insurance fraud.
“The Ontario government has taken some recent initiatives to address the high cost of auto insurance claims in the province, but still faces a number of challenges to ensure that premiums remain affordable and accident benefits are reasonable,” McCarter said in a statement.
Industry estimates put the value of fraudulent claims in 2010 at $1.3 billion, the report notes. A government-appointed task force is currently working on providing recommendations on how to combat insurance fraud. Their findings will be released in the fall of 2012.
