Insurance Opinions

FAIR WRITE OFF VALUES: If you've been in a car accident where the cost for insurance to fix it is greater than the current value of the car, the insurance company will suggest a value they will pay you to write it off & that value is often less than the car is worth or will cost to replace (just part of the little game insurance companies play to keep more money in their pocket), so don't be afraid to arm yourself with accurate prices from the Canadian Red Book retail values (available to look at for free at most public libraries) & argue with the insurance company until they give you close to a fair market value. If you look up the correct vehicle in the Canadian Red Book & adjust the price using the odometer tables, option tables & region tables, you'll have a pretty good idea what similar cars sold for last month at used car dealers & then you'll know whether you are being offered a fair price. Remember that the insurance company will subtract your deductible from the total after taxes have been added in. In Ontario you will be given PST & GST on the value of the car from your insurance company. If you buy a used car privately, you are not required to pay the GST which will save you 7% (6% after July 1st 2006) over buying from a dealer, but then you won't get a warranty either.

FSCO SEEMS TO WORK ON INSURANCE COMPANIES BEHALF, NOT THE PUBLIC'S BEHALF: In Ontario, car insurance rules are approved (rubber stamped) by the Provincial government agency called "Financial Services Commission Of Ontario" (FSCO) (an arm's length agency of the Ministry of Finance). Unfortunately this organization rubber stamps all sorts of submitted rules & regulations from insurance companies that are in favour of insurance companies & not necessarily in favour of the public which voted this liberal government into power. Insurance companies have the gall to tell you they are "mandated" by FSCO to do what they do, but the truth is that they "lobby" FSCO to their own advantage & the public has nobody looking out for their interests, including the government. What we need is a complete overhaul of FSCO regulations to make them much more in favour of the public & a consumer bill of rights for car insurance, but our Ontario Provincial Liberal government doesn't seem remotely interested in doing this. I will be adding to this list of things as time permits, but here are some examples:

• FSCO allows insurance companies to give discounts based on how long you have been with your insurance company (e.g. on my test policy Belairdirect gives a 6.8% discount if you've been with your current insurance company 3 years or more), which effectively discourages people from shopping around each time the policy renews. If you have felt abused by your agent or insurance company in the past, or if you felt their rates were unfair or too high, this effectively adds insult to injury because your costs will be higher if you shop around each year or two, just because you choose to go to a different company. FSCO should only approve discounts on things that affect the liability pay out (risk) of the insurance company, they should not be approving insurance policies that discourage competition & shopping around.
• FSCO allows insurance companies (like Allstate) to check your credit rating when considering you as a client. Your credit rating does not affect your driving record & can change dramatically if you should have financial troubles, which also ends up penalizing you by much higher premiums for those insurance companies who consider credit rating as a pricing factor. FSCO should not allow credit rating to be a factor in determining price or availability of insurance.
• When a marriage separates, each spouse usually lives at a separate location until they can decide whether to divorced or get back together & frankly it's NOBODY's business until the couple makes the decision of whether it will be a final divorce, but the FSCO allows insurance companies to force the couple to have separate policies when living apart, or at least to lose the multi-vehicle discount they were enjoying which is aimed at couples living in the same house, even though there is usually little or no increase in liability to the insurance company. In my case we were getting a 15% multi-vehicle discount with Citadel Assurance, so this added a total of $495. to our total costs by splitting the policy in two. The people in marriages that are splitting up already have enough problems & expenses without insurance companies "putting upon" them in their time of trouble, especially when this doesn't represent an increased risk to the insurance company. Interestingly, the Ontario Family Law Act (another Ontario government branch) offers some protection to couples transitioning through to divorce, but unfortunately they & the FSCO branches of the Ontario government apparently don't talk to each other or harmonize their regulations & FSCO approves policy increases like this in direct contravention of other government regulations. FSCO should be harmonizing with other government regulations & should change the definition of "multi-vehicle" to mean more than one vehicle normally at the same location, but also at separate locations during times of marriage transition. That of course would take away an "excuse" for insurance companies to charge you more, so don't expect it to happen.
• FSCO says that if one person from a married couple on a multi-vehicle policy moves away to a different location for any reason (separation, abuse, etc.) that they must immediately inform their insurance company or agent. This is in direct conflict with other laws from the same provincial government that give protection to people in transition. For example, a woman who leaves an abusive marriage, may not want to reveal her new living address for fear of her life, but FSCO rules insist that she give the new address to her agent or insurance company.
• FSCO allows an increase in your premiums because of an at-fault accident by somebody else driving your car, even if years later you are no longer living in the same house or on the same policy as that person. Shouldn't premiums be based on your own driving record & not somebody else's record whom you were once associated with?
• FSCO allows insurance companies to track not-at-fault accidents & to pass this information on to other companies who mention the accident if you shop elsewhere. If the accident wasn't considered at-fault & therefore doesn't affect the new policy risk to the insurance company, why does FSCO allow insurance companies to track & imply to you that you've been in an accident when it wasn't a countable accident?
• FSCO does not require insurance companies to offer 28A forms or to mention their availability & therefore you may be paying a higher premium because of an adult child living in your house, even if that child isn't using your car. You wouldn't even know this because FSCO also doesn't require insurance companies to list that you are charged a premium because of other drivers in your household.
• FSCO permits insurance companies to refuse coverage at renewal time, for almost any frivolous reason at all. FSCO regulations need to be tightened up to a very short list of reasons why an insurance company may refuse to continue to cover you. Once you are "refused" coverage by one insurance company, they tell other insurance companies & it's a factor thereafter for determining premiums.
• FSCO says that if you switch insurance providers at policy time, you can't just phone your current insurance provider to cancel your policy or tell them you don't want to renew because you are going with another agent, you must also give them something in writing. In other words, the policy automatically renews & you are considered in default of payment if you do not cancel in writing.
• FSCO will reveal whistle blowers names to the ombudsman of an insurance company, which flies in the face of trying to protect the whistle blower & allows the insurance company to take vengeful behaviour. So much for privacy laws that were suppose to protect the public from information it reveals to the government.
• FSCO doesn't insist that insurance companies pay fair market replacement value for written off cars, but instead lets them use "paid" value lists published by industry insiders that are favourable to the insurance company. These values are not representative of what typical used cars actually sell for (they are significantly lower). There's this little under valuing game insurance companies play when a car is written off & you are usually the loser, though you might not realize it at the time. Just try to buy the exact same car for the insurance money (less the deductible) & you'll find that you can't, because the fake values the insurance company uses to pay the customer, are not based on real world values. Just another little scam that the FSCO allows insurance companies to get away with.
• FSCO makes no requirement of insurance companies to determine if car loans are paid off before they write a cheque for a written off car. This results in checks made out to the car owner & the car financier, even if the loan has been paid off (makes the cheque difficult to get cashed). Insurance companies should be required to pay only to those who "currently" own title on the car. That is pretty easy to determine, but insurance companies don't bother because they don't have to.
• FSCO doesn't force Insurance companies or their agents to allow a customer to assign an agent or spokesperson to deal on their behalf. If an insurance company can assign an "agent" to deal on their behalf, then so should a customer be allowed to assign an "agent" who can deal for them, but the FSCO won't make a ruling to this effect so that timid people can have a stronger person advocate or speak up for them. Insurance companies & agents often refuse to speak to a customer's spokesperson, even when they are told by the customer in writing. This effectively brow beats the passive customer into compliance. Once again, the FSCO doesn't prevent insurance companies from bullying their clients.

PRESIDENT'S CHOICE FINANCIAL INSURANCE: warning, an exercise in wasted time & misquotes for car insurance.

28A EXCLUDED DRIVER ENDORSEMENT FORM: In Ontario, if your car insurance agent tries to tell you that you must list your G or G2 licensed children on your car policy because they are living at home, even though you never allowed them to drive your car, request that the agent send you an Ontario Policy Change Form (OPCF) 28A Excluded Driver Endorsement form to sign & return. Insurance companies will try to charge you extra if you don't know about this exemption form & they won't usually tell you about this form. Insurance companies in Ontario are not even required to provide this exemption form, though most do & they are not required by law to tell you of it's existence when you have a G2 or G child living under your roof that is not ever using your car. Insurance companies assume that a some point you might allow your G or G2 licensed children living with you at home to drive the car, which increases the liability risk to the insurance company. If they tell you that a 28A Excluded Driver Endorsement form was available & you used it, then they'd have to lower the price they charge for your car insurance. Often you may not even know that the insurance company may be charging you extra for coverage on your children you don't need (read your policy carefully). I only found out because my wife & I drive identical vans, except hers is 2 years older. When the policy came in, the older van was more money & the agent for Yarmouth Mutual Fire Insurance Company couldn't (read wouldn't at first) adequately explain why. Finally it was discovered that they had one of our kids listed as being on the policy (in this case a G1 driver), even though she no longer lived at home & didn't drive the car, but this information DIDN'T show up on our policy invoice. More recently when my agent found out that my son still lived at home (G2 driver at that time), he wanted to charge us more, even though my son is virtually never allowed to drive our cars. I requested a 28A exception form which my son & I both sign, stating that he will not be driving the car. This was the only way to avoid the higher premium & you have to know about this 28A form to take advantage of it. Don't let your insurance agent con you into higher premiums, ask specifically whom he has listed on the policy. Once your insurance company has accepted you with a 28A form, even if their policy changes, they are not allowed to drop coverage on you because you have a 28A. Article first written November 1/2003, last updated November 6/2003

REFUSED COVERAGE: In Ontario, car insurance is covered by private insurance companies & they are permitted by the "Financial Services Commission Of Ontario" (an arm's length agency of the Ministry of Finance), which is the government regulatory body for insurance (1 800 668-0128), to refuse to issue you a new policy at the annual renewal time for almost any reason. For example, if your G2 or G licensed children get in an at-fault accident where they total your car, it's not unusual at policy renewal time for the insurance company to insist that the G2 driver who got in the accident be dropped from the policy. Sometimes they will drop the parents too, even though they might have an accident free driving record for several years with not even a speeding ticket. There are insurance companies that are willing to insure high risk drivers that other companies won't insure, but you will pay an extremely high premium. It's also important for parents to realize the extent of liability they are taking on when they allow their children to be included on their car policy. Should your child get in an at-fault accident on your policy, even if they are subsequently dropped from the policy, the parents car insurance premiums will likely go up. At my insurance renewal time in June of 2004, my insurance company (Yarmouth Mutual Fire Insurance Company) tried to drop me for a frivolous reason, even though my wife & I have a perfect driving record for many years. The real reason was most likely something else, like the low premiums I was paying which can't be raised under the new Ontario government legislation, or a not-at-fault accident my wife got in which the insurance company has to pay out on, but can't increase premiums. There appears to be a trend in the insurance industry to refuse coverage at renewal time (any frivolous reason will do) for those customers who are the lowest paying & still have good driving records, so they will have to go elsewhere & pay a higher premium. Doing this effectively helps insurance companies circumvent the government legislation & over all get more money. I suspect that insurance companies might even secretly keep data of whether they have lost money on you (i.e. if you got in a not-at-fault accident where they had to pay out, but couldn't increases premiums) & they might be secretly using this info against you to not renew your policy, but using some other excuse. However, if the reason doesn't seem to be valid for not continuing your policy or the parents policy, complain to the Financial Services Commission of Ontario at 1 800 668-0128 & they might make your insurance company offer you a policy (they did in my case). I've heard of adult children who got in an at-fault accident with their own car on their own insurance policy, yet the parent's policy was dropped even though they had a good rating, simply because the parent & child lived in the same house. In a case like that, tell the insurance company that the adult child is willing to sign a 28A form indicating they won't be driving the parents car & if they do, then the insurance company doesn't have to cover an accident. That usually shuts them up pretty quickly & then they have to come up with another frivolous excuse or offer the good driver a policy. First written November 6/2003, last updated Sept. 2/2004.

DETERMINE WHO IS AT FAULT AT THE ACCIDENT SCENE: In Ontario with no-fault insurance coverage, it is extremely important to conclusively determine who is at fault & be able to prove it later. No-fault insurance doesn't mean that it doesn't matter who is at fault, it means that regardless of who is at fault, your insurance company will pay out your portion of the claim, even if the other guy (heaven forbid) doesn't have insurance. It still matters who is at fault, because this determines whether or not your car insurance premiums go up & whether or not your insurance company will even insure you at the next renewal date. If you were found to be 100% not at-fault, then your rates aren't allowed to go up because of the accident. If however you were at-fault, or determination could not be made, then you may be deemed to be 50% at-fault & your rates would still go up. If you are in an accident where you clearly are not at-fault, DO NOT move the vehicles until the police come & determine fault. If the police ask you to drive over to the accident reporting station to save them the cost & time of coming out to the scene of the accident, INSIST that the police come to the scene of the accident, because this may be your only proof that you were not at fault. Once you've moved those vehicles, it could be your word against the other guy & he/she might lie. Alternatives for proof is to get a witness who saw the accident, take multiple pictures of the accident scene before you move the cars, or get the other person to acknowledge in writing that they were 100% at fault BEFORE you allow them to move their vehicle (most people won't give you this in writing). I have personally witnessed several incidents where an at-fault driver later lied about what happened in order to make it appear like he was not at-fault. If you are 100% not at-fault, get proof at the scene of the accident, before you move the vehicles. First written November 6/2003

INSURANCE FOR G1 DRIVERS LICENSES IN ONTARIO: If your teenager has just received a G1 beginners drivers license that requires a full G driver to always be with him/her while driving, by law in Ontario this is NOT suppose to increase your car insurance premiums, but you are required to report to your insurance company that you are adding a G1 driver to your policy. Once the G1 driver graduates to the next beginners level of G2, only then may some insurance companies increase your insurance premiums because of the increase risk. These things are mandated by law by the "Financial Services Commission Of Ontario" an arm's length agency of the Ministry of Finance, which is a government regulatory body that can be reached at 1 800 668-0128. However, I've just discovered that some car insurance companies including mine "Yarmouth Mutual Fire Insurance Company" have figured out a loophole so they can charge you a higher premium for a G1 driver. If the main policy holders already have an excellent driving record & are over 45 years old (E class for Elite), anytime you add another driver to the policy who is under 45 years old (which nearly all G1 drivers are), then it drops you to a #6 classification which in my case raised the premiums by $86.86 because we had a G1 driver attached to our policy. There was nothing listed on my policy to indicate this premium for the G1 rider, the only reason I caught it was that my wife & I drive identical vans & hers was a higher premium, even though it was 2 years older than mine. The "Insurance Bureau Of Canada" (416 362-2031) & the "Ontario Ministry of Transportation" also said that having a G1 driver is NOT suppose to increase your car insurance premiums, but some insurance companies are getting away with raising premiums anyway & actually blame the "Financial Services Commission Of Ontario" claiming that they approve their pricing submissions (which may be true). I must admit that when following this up with the "Financial Services Commission Of Ontario" I was not allowed to speak with the policy makers, but it was quite clear to me that they let this loophole slip by them. Perhaps our government institutions which are charged with looking after public interests such as the "Financial Services Commission Of Ontario" should be taking a more careful look at insurance company pricing structures to make sure they comply with government rules & to make sure they close any loopholes that would allow insurance companies to charge more than they are suppose to. Article first written June 18/2003, last updated November 6/2003

CAR INSURANCE VOIDED: If you are the parent of a teenager with a G2 beginners graduated drivers license in Ontario, you should be aware that insurance policies do not cover you at all for liability or collision if your car is in an accident when a G2 driver is at the wheel & any of the car's occupants are not wearing a seat belt, or if the G2 driver has ANY amount of alcohol in his/her blood (even a legal amount). You won't likely find these policy exemptions even in the fine print of your auto policy, or in the insurance companies handbook & your insurance agent probably won't even know about it. But once your G2 driver has had an accident, the insurance company "adjuster" will inform you of this "hidden" policy & show you it's existence in the big thick manual kept only at the insurance companies head office premises (it happen to me with Co-Operators Insurance & it happen to a friend of mine). If you passively go along with it, the insurance company will be only too happy to use this loophole to get out of paying the liability & collision damage coverage you paid for (could cost you your house & life savings if there's a liability suite). However, insurance companies do not want a court case which might set a precedence against them, so they will often drop the issue & pay out the claim if you threaten to take legal action against your insurance company. There are special rules that apply to beginner G1 & G2 drivers. These rules ARE listed in the Ministry of Transport's drivers handbook which your child is required to read before passing their written test. One problem is that the drivers handbook doesn't actually say what the consequences would be if you break any special rules for G1 & G2 beginners permits, so the insurance industry uses these rules to null & void your insurance & weasel out of paying out for an accident, but they neglect to tell you when you when you list your G2 driver on the policy (how convenient). The other problem is that the policyholder parent of a G1 or G2 driver passed their written driving test many years ago (beginner license rules were different) & therefore the parent isn't always aware of these rules & isn't required to read the handbook, but the parent is still on the hook for the legal ramifications of collision & liability if the child breaks the special rules for G1 & G2 beginner licensees. The ultimate solution would be for insurance companies to do the responsible thing & list these exemptions clearly in your policy (& the handbook) as well as making sure that insurance "agents" inform all customers when signing up a G2 driver that these policy exemptions exists (they should make you & the G2 driver sign that you know about it). Provincial governments should also be shouldering some of the responsibility by advertising such exemptions in their anti-drinking campaigns & by insisting that insurance companies not be allowed to weasel out of coverage based on a "hidden" policy exemption that wasn't revealed to the customer. Article first written Jan. 2/2001, last updated November 6/2003.

By Doug Hembruff.