Cuts a step in right direction

For years, the cost of auto insurance has been a source of frustration for many people across the northwest.
Despite legislative changes in 2010 that reduced costs for auto insurance companies, premiums have continued to rise—even for those with clean driving records.
Here in the northwest, these increases have been particularly painful for hard-working families and seniors who already are struggling to pay their bills and who rely on their vehicles to get to work, buy groceries, and travel to medical appointments.
As a result, the price of auto insurance has been one of the most common concerns I’ve heard about from you through letters, e-mails, phone calls, and speaking to you in person at trade shows, fairs, and other events.
In fact, in this past spring’s budget survey, which I sent out to every home in the Kenora-Rainy River riding, more than 90 percent of respondents rated lowering premiums an extremely high or very high priority.
I’m pleased to say something is being done.
Back in the spring, I joined my NDP caucus colleagues in supporting a motion calling on the premier to reduce auto insurance premiums by 15 percent.
Thanks to public pressure mounted on the governing Liberals, the motion passed and paved the way for its inclusion in this year’s provincial budget.
While some were skeptical, last week the provincial government announced its first step in implementing this priority. Finance minister Charles Sousa said he has instructed the Financial Services Commission of Ontario, which oversees insurance premiums, to instruct insurance companies to begin cutting rates in time for January.
Premiums will be reduced by at least eight percent next August—and the full 15 percent a year after that.
While it is not the immediate 15 percent cut that needs to be made, it is a step in the right direction. By next August, the average consumer will see a savings of a little more than $100 per year.
Once the full 15 percent is achieved, consumers can expect their annual auto insurance bill to drop by roughly $200.
Since the Financial Services Commission has to approve any rate increases, fears of companies increasing premiums in advance of the reduction should be unfounded, as will be suspicion that premiums in the northwest will rise in order to reduce those in southern Ontario.
Arguments like these have been used by the Conservative Party, which voted against the motion to reduce premiums, in hopes of creating cynicism in order to protect insurance companies’ already soaring profits.
While more needs to be done to protect consumers and reduce our cost of living, I believe this announcement is a good news story for people in the northwest who are tired of the high cost of this essential service.