Consumers in Ontario are receiving $685 million in total premium relief for their car insurance in the form of premium deferrals, rebates, refunds, rate reductions and other means during the COVID-19 emergency, says the Financial Services Regulatory Authority (FSRA).
“At the onset of the COVID-19 emergency, to help ensure that auto insurance rates are just and reasonable, FSRA strongly encouraged insurers to provide customer relief that reflected the change in driving patterns and reduced costs and which would help offset financial hardship their customers were facing due to the COVID-19 outbreak," said Tim Bzowey, FSRA’s executive vice president, auto insurance products.
"FSRA also released guidance that is aimed at ensuring there are no regulatory barriers to consumers being treated fairly, and which outlined that insurers have a number of options for providing customers with financial relief during this temporary declared emergency period."
Rate relief began when COVID-19 hit
Ontario insurance companies began offering relief measures since the emergency began, especially for those who had lost their jobs. Many insurers responded by sending more than a quarter of a billion dollars back to Ontario auto insurance consumers in rebates and rate reductions.
A FSRA survey shows that Ontario auto insurance consumers received $220M in total premium relief from March 1 – April 30, with an additional $465M in planned relief from May 1 onward.
Relief equals almost 5% of annual premiums
This $685 million represents consumer relief equal to 4.9% of annual premiums benefiting 70% of Ontario auto insurance customers.
As the economy starts to re-open, FSRA is monitoring how insurers are responding and working to ensure Ontario consumers are being treated fairly by encouraging insurers to offer their customers all available forms of relief that give credit for less driving and lower loss claim costs.
FSRA says it will conduct a follow-up survey in July to assess the consumer relief provided to the end of June.
