Young drivers and taxi fleet drivers in Ontario are among those hardest hit by greedy auto insurance companies. Instead of paying premiums based on their records, these drivers pay the highest premiums in the province.
The insurance companies write their own ticket in Ontario. Their 2012 profits of $4.4 billion (up 24% from 2011) are testament to their greed.
No fault insurance, brought in by the Ontario Liberals in 2010 to bring down sky‑high premiums affecting all drivers, slashed benefits in half, while reducing premiums by a fraction. Accident victims are paying the highest price, with many forced to sue their own insurers for the benefits they need and thought they had.
But young people, especially men under 25, are targeted by the insurance companies. Some pay premiums as high as $1,000 per month. They have no choice. In many parts of Ontario, a car is essential if you work, and insurance is compulsory, not an option.
Ontario’s public transportation systems are not workable for anyone travelling any distance to go to work. For these people, a car is a tool of work.
Why do the insurance companies charge so much? Because they can. The Ontario government allows them to build a 12% profit into every policy.
Last spring the Wynn government promised to make insurance companies reduce premiums by 15%. But in December, the reduction was only 4% according to news reports, and not in premium cuts, but in so‑called fraud reduction.
Meanwhile, insurance companies refused to insure cab fleets in Hamilton until they accepted rates that have some drivers paying $1,000 a month or more. The insurance companies essentially starved them out until they capitulated. The result? Most cab drivers make less than the minimum wage and work 72 to 84 hours a week. Now that’s slavery.
The biggest fraudsters are the insurance companies, which the government refuses to confront, let alone control. The Premier says it’s too complex and she’s afraid the companies will refuse to write insurance ‑ like they did in Hamilton.
In the four provinces with public auto insurance, premiums are about 50% lower than in Ontario, and benefits are generous. Furthermore, premiums have nothing to do with age or address, they’re based solely on driving record. No more sky‑high premiums for young drivers and fleet drivers.
As an added bonus, these crown corporations are able to generate surpluses for the public treasury, much as the LCBO generates about $2 billion annually for Ontario’s public purse. This money could be used to build public transit in Ontario, to expand GO transit and other rapid inter‑urban rail service, and to reduce transit fares.
Public auto insurance could be part of the solution to reduce gridlock and cars in Ontario ‑ which would be good for people and the environment.
Recent calls to privatize public transportation, including the TTC in Toronto, combined with Premier Wynn’s determination to utilize tolls, taxes and user fees to fund transportation upgrades, are a logical extension of government policy that has put corporate greed ahead of people’s needs for many years. Liberal, Tory, and NDP governments have all contributed actively or passively to this mess. That’s why Ontario is now facing a crisis in transportation.
Now, Chrysler ‑ a very profitable multi‑national corporation ‑ is demanding $460 million in public money to maintain its car plants and 4,600 jobs in Windsor and Brampton. They also want wage, benefit, and pension concessions from Chrysler workers.
Instead of bending to blackmail, federal and provincial governments should tell Chrysler to invest or not, but the plant and equipment must stay in Canada for development of a Canadian car that’s small, affordable, fuel‑efficient and environmentally sustainable.
The solution is not more privatization, but more public ownership and more public control. More democracy, and less corporate greed.
This should include public auto insurance, and a strong public urban and inter‑city transportation system geared to meet the needs of working people and the public.
If right wing governments and corporations are unwilling to move in this direction, they should be moved out of the way in the coming election.
Public auto insurance, investment in public transit, lower fares, and unionized well‑paid transportation jobs are at the core of a progressive people’s transportation policy. This will be a critical issue in the coming Ontario election.
Liz Rowley is leader of the Communist Party of Canada (Ontario) and a candidate in the coming provincial election.