New Auto Insurance Legislation: How Does it Impact You? - Diamond and Diamond Lawyers

New Auto Insurance Legislation: How Does it Impact You?

On November 20, 2014, Ontario passed the “Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014 (Act).” According to the Ontario Ministry of Finance, “[The intended aim of this Act is to] help the provincial government fight fraud and abuse, reduce costs and uncertainty in the auto insurance system and protect more than nine million licensed drivers across the province.”

The Act’s goals are to keep the auto insurance system fair, reliable and affordable by:

  • Increasing the claims settlement process speed to help injured Ontario drivers.
  • Providing consumer protections specific to towing and vehicle storage.
  • Authority for the province to change the current 60-day period that a vehicle can be stored after an accident.

These changes will help contribute to lower claim costs for insurers and reduce rates for drivers.

The Toronto Star recently posted an article on the new auto insurance legislation and spoke to a member of the Ontario Trial Lawyers association (OTLA).

While the Act provides some new protections to consumers, OTLA argues that the legislation removes a motorists’ right to sue an insurance company for denying their claims.

According to Steve Rastin, president of the OTLA, “We are profoundly disappointed in the government for what they did today” in relation to the clause that replaced the right to sue for denied claims with an arbitration system. He points out that this will be both costly and time consuming.

Rastin and the OTLA support most of what is in the bill, however, a few key points are unacceptable: the right to sue and reduced interest rates for injured claimants.

The then-minority Liberal government agreed to an NDP demand for a 15 per cent cut in car insurance rates over two years in order to get the Ontario provincial budget passed. In the last year, auto insurance rates have dropped 6 percent. While it’s too early to deem the Act a success or failure, despite flaws, it’s a good start in protecting consumers from insurers and reducing rates.

If you find yourself in an accident, Diamond and Diamond Personal Injury Lawyers have the experience in navigating the insurance claims process and helping accident victims get the compensation they deserve. If you’ve been injured, call us on our free injury hotline at 1-800-567-HURT (4878) or contact us here

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