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HomeMy WebLinkAboutThe Huron Expositor, 1989-03-15, Page 5i irns : U insurance rate rise ONTAf110 AUTO INSURANCE: 'INJURY -CLAIMS ON THE 1RISE lOaitirlo=mottniats'are'brecing themselves gar aenewcar'insuiranee!system to go^•fnto *ffeettiatexathisayear q'he°changet'is=good rasewielor=inlet'yotMg-mtlle tlriveriabut for =anest^tithers. It =eotildnnean r It gher .costs. -This°193he"firstreportin afonrpartserles e ingthenew•program-and explorhtg the1easonwbehtnntbenekaitges. 'Most Ontario car owners will pay more torinsurance.under-the new system put in place 'by 'the provincial government and scheduled to go into effect not later than June 1. Under the new system, premium rates are -set not by the insurance companies but by the Ontario Automobile Insurance Board, established by -the government last year. The Board, on February 13, established new benchmark rates which -are 7.6 per cent higher than the average charged in Ontario at the present time. In- surance companies are allowed to charge lip to nine per cent more than the ben- ehmark rates or as much as 20 per cent less. The new rates will come into effect at the same time as legislation which forbids fur- ther use of age, sex, marital status or physical handicap as rating criteria. In- stead, rates will now be based on where drivers live, the kind of car they use and what they use it for. The number of years all regular drivers have been licensed and their accident and conviction history will also affect rates. Whether a driver's rates under the new system are higher or lower than at present. will also depend upon two other factors. The first is the level at which each in- surance company decides to set its rates, within the range that the Board allows. The second factor is where the company's rates are now. If the company's rates have been below average, they will now have to be brought into the range approved by the Board. If a company's rates have been higher than average, a amalter increase. or even a reduction, may be required to meet the Board's approved range of rates. The basic principles of car insurance are simple: A number of drivers who face the risk of costly accidents pay premiums which are used to compensate those who suffer a loss. Those who don't have ac- cidents help pay the losses of those who do, Ontario law requires all drivers to be covered by liability insurance to pay for damage or injury they might cause to others. When' claims payments go up as they have in recent years, premiums should keep pace, to ensure that enough funds are available to cover future claims During the early 1980s, this cause -and effect process was interrupted when high interest rates gave car insurance com- apanies unusually high investment income, • ..enabling them to delay premium -increases. But in 1985 and 1986, after interest rates enosedived, Ontario" car insurance -°premiums jumped sharply as the industry ,aattied to keep pace with rising accident :costs. .As costs and rates continued climbing in 1987, public complaints grew. In response, the provincial government set up the OAIB ato investigate the situation and decide on :.fair :rates. In the meantime, the govern- •.:mentfroze all rates in April 1987, and :limited 1988 rate increases to 4.5 per cent r. in January and 4.5 per cent in August. Insurance -companies say they lost $142 million on Ontario car•coverage in 1987 - ,the third straight deficit year. Over 93 cents of every 1987 premium ..dollar went to pay for accident claims. Operating and other expenses ate up the ';•'rest and.more - including investment ear- nings. Insurance experts expect 1988 n• -results will be worse. Industry figures show car insurance has .'been losing money across the country, but the situation is worst in Ontario. What's behind the rising costs of ac - is 81 82 83 84 85 86 87 KEY COST FACTOR: In recent years, the number of car accidents per 100 vehicles on Ontario roads has been consistently lower•than the 1981 rate. But the trequency of bodily injury claims has shot up since 1983 — adding to the using Cost of car insurance cidents - and why is the Ontario situation different? Jack Lyndon, president of the Insurance Bureau of Canada, say's the answer lies partly in Ontario's current economic boom. "More Ontarians can afford cars, .and they're travelling more - increasing traf- fic congestion that causes more ac- cidents," he said. The cost of repairing and replacing damaged cars is boosted by changing technology and higher prices. Replace- ment, part costs have jumped' 85 per cent since 1980, while unibody construction and front -wheel drive make cars more vulnerable to major damage - leading to • more insurance write-offs. Still, a close analysis shows that - while .the total number of accidents has •grown - ,thenumberof:crashesperhundred Carson the road has remained fairly stable for several years. Insurance officals say the most signifi- cantproblem is the skyrocketing frequen- cy and costs of personal injury claims. From 1980 to 1987, injury claims costs nearly tripled, jumping by 173 per cent to • about $1 billion. One cause of this trend was noted by On- tario Supreme Court Justice Coulter Osborne after his 1987 inquiry into motoi vehicle accident compensation. Hi reported a growing tendency by injure( claimants to sue, with close to 60 per cen hiring legal counsel. Legal involvement almost automaticall: adds 10 to 15 per cent to settlement costs Mr. Justice Osborne said, and `lawyer. are increasingly inventive in thei development of evidence of economic loss" by injured parties. UCW packing a bale for Goodwil • The Egmondville United Church Women met on March 6 at the church. Janet Nipple opened the meeting with scripture. The business .period included several in- yitation,tolocal thank -Offerings, the annual .jaondon Conference on April 3 and 4 at 14eamingtan,.the spring bake sale on March 3,at 10:30 am at Smith Pool's store. The LJCW',waspacking a bale ready for Goodwill ,early in April. Janet and Rev. Cheryl Ann introdcued the -theme on "Refugees". Janet asked Rev. Cheryl Ann gave an account of th .,everyone to reflect on a time when they felt Nanephosy family who is being sponsorei [alone or .in a lonely situation. Rev. Cheryl by Huron Perth Presbytery. Members wer tAnn . presented a monalogue called `• 'The happy to hear they aresettling in and.begin •Human Family" with some U.C.W. ning to feel more athome. members reading parts. Members tried to The April meeting is on April 3 at 8 pm. understand a refugee's feelings c loneliness, humiliation and loss. Severs passages of scriptures were discussed dea ing with sojourners and how God wante people treated. A video "A Journey to Nowhere" showe how so many refugees tried to survive i refugee camps with -much .overcrowdin and little hope of immigrating to anothe country. The United Church is helping wit medical missionaries and funds. SPRINGFASHI!'N L: V41IMC 'SHOP :EARLY : ORIREST ;S.EL ECT1ON ys14 TM vry NOW AN STOCK GREATEEASTERVMS 3 IIn J. 41013h 27! 23 0 Ontario's buoyant economy has meant more injured claimants are employed and earning higher wages than in years past - resulting in higher claims for lost income. At the same time, hospital and medical costs are soaring. • The insurance industry points out that' the present legal system aisso'enables some injured persons to win "double recovery" by claiming compensation from other sources, such as employers' group - insurance plans, on top of car insurance claims. Prejudgement interest is often added to damage awards, from the date notice of legal action is filed. And Ontario courts usually increase large lump -sum awards to cover income taxes to be paid on in- terest the award money will earn. All ofethese costsegreatly increase ...the sums paid 'nut by automobile insurers - and ultimately affect the cost of insurance to consumers. The insurance industry has been urging reform of the legal system to reduce these extra costs while providing reasonable compensation for injured persons. THEI4IJRON EXPOSITOR, MARCH 15, 7989 men's '. -V SEAFORT1-I OPEN 6:30 a.m. MONDAY TO TRWDAY 1 8 a.m.'Saturday and Sunday THURSDAY TO SUNDAY 'MARCH 16 TO °MARCH 19 COFFEE and DONUT or 'MUFFIN WITH THIS COUPON ': • FRIDAY - St. Patrick's Day Surprises Side Entrance Off Parking Lot Or Use Cafe Entrance Sat e947/P12 ea rh (Diel ` DIVISION OF BALL & FALCONER FUNERAL HOME LTD. Manager Director Director C. D. 1)enomme M. S. Falconer 527-1142 'MFS. 'MARY CATHERINE 'MCIVER of Seaforth died on Fri- day, March 10, 1989. Funeral mass was held at St. James Roman Catholic Church, Seaforth on Monday, March 13, 1989. 'PORK BACK RIBS LB. 2 59 DELI SLICED, BONELESS SMOKED CHICKEN BREAST LB. 4 e 79 BLADE or SHORT RI ROAST LB .8 EASTER HAMS and TURKEYS MEDIUM GROUN BEEF LB. .79 WHOLE PORK LOIN WRAPPED LB. his 3Nll�k �n1y ea:1n4tOrer r Ml r 44.hailiOntleT44inaviiifFatttitteietis Seaforth Community osp tab SE Wednesday, March 22 3:00 - 8:00 P.M. Come take the .guided tour of your Community Hospital ALL WELCOME ANSTETT JEWELLERS LIMITED r1; -4 1 1 140_ INJURY CLAIMS 130 120 ._. 110 - 100 . I , 90 I ACCIDENTS 80 60 94 484 Se 81 82 83 84 85 86 87 KEY COST FACTOR: In recent years, the number of car accidents per 100 vehicles on Ontario roads has been consistently lower•than the 1981 rate. But the trequency of bodily injury claims has shot up since 1983 — adding to the using Cost of car insurance cidents - and why is the Ontario situation different? Jack Lyndon, president of the Insurance Bureau of Canada, say's the answer lies partly in Ontario's current economic boom. "More Ontarians can afford cars, .and they're travelling more - increasing traf- fic congestion that causes more ac- cidents," he said. The cost of repairing and replacing damaged cars is boosted by changing technology and higher prices. Replace- ment, part costs have jumped' 85 per cent since 1980, while unibody construction and front -wheel drive make cars more vulnerable to major damage - leading to • more insurance write-offs. Still, a close analysis shows that - while .the total number of accidents has •grown - ,thenumberof:crashesperhundred Carson the road has remained fairly stable for several years. Insurance officals say the most signifi- cantproblem is the skyrocketing frequen- cy and costs of personal injury claims. From 1980 to 1987, injury claims costs nearly tripled, jumping by 173 per cent to • about $1 billion. One cause of this trend was noted by On- tario Supreme Court Justice Coulter Osborne after his 1987 inquiry into motoi vehicle accident compensation. Hi reported a growing tendency by injure( claimants to sue, with close to 60 per cen hiring legal counsel. Legal involvement almost automaticall: adds 10 to 15 per cent to settlement costs Mr. Justice Osborne said, and `lawyer. are increasingly inventive in thei development of evidence of economic loss" by injured parties. UCW packing a bale for Goodwil • The Egmondville United Church Women met on March 6 at the church. Janet Nipple opened the meeting with scripture. The business .period included several in- yitation,tolocal thank -Offerings, the annual .jaondon Conference on April 3 and 4 at 14eamingtan,.the spring bake sale on March 3,at 10:30 am at Smith Pool's store. The LJCW',waspacking a bale ready for Goodwill ,early in April. Janet and Rev. Cheryl Ann introdcued the -theme on "Refugees". Janet asked Rev. Cheryl Ann gave an account of th .,everyone to reflect on a time when they felt Nanephosy family who is being sponsorei [alone or .in a lonely situation. Rev. Cheryl by Huron Perth Presbytery. Members wer tAnn . presented a monalogue called `• 'The happy to hear they aresettling in and.begin •Human Family" with some U.C.W. ning to feel more athome. members reading parts. Members tried to The April meeting is on April 3 at 8 pm. understand a refugee's feelings c loneliness, humiliation and loss. Severs passages of scriptures were discussed dea ing with sojourners and how God wante people treated. A video "A Journey to Nowhere" showe how so many refugees tried to survive i refugee camps with -much .overcrowdin and little hope of immigrating to anothe country. The United Church is helping wit medical missionaries and funds. SPRINGFASHI!'N L: V41IMC 'SHOP :EARLY : ORIREST ;S.EL ECT1ON ys14 TM vry NOW AN STOCK GREATEEASTERVMS 3 IIn J. 41013h 27! 23 0 Ontario's buoyant economy has meant more injured claimants are employed and earning higher wages than in years past - resulting in higher claims for lost income. At the same time, hospital and medical costs are soaring. • The insurance industry points out that' the present legal system aisso'enables some injured persons to win "double recovery" by claiming compensation from other sources, such as employers' group - insurance plans, on top of car insurance claims. Prejudgement interest is often added to damage awards, from the date notice of legal action is filed. And Ontario courts usually increase large lump -sum awards to cover income taxes to be paid on in- terest the award money will earn. All ofethese costsegreatly increase ...the sums paid 'nut by automobile insurers - and ultimately affect the cost of insurance to consumers. The insurance industry has been urging reform of the legal system to reduce these extra costs while providing reasonable compensation for injured persons. THEI4IJRON EXPOSITOR, MARCH 15, 7989 men's '. -V SEAFORT1-I OPEN 6:30 a.m. MONDAY TO TRWDAY 1 8 a.m.'Saturday and Sunday THURSDAY TO SUNDAY 'MARCH 16 TO °MARCH 19 COFFEE and DONUT or 'MUFFIN WITH THIS COUPON ': • FRIDAY - St. Patrick's Day Surprises Side Entrance Off Parking Lot Or Use Cafe Entrance Sat e947/P12 ea rh (Diel ` DIVISION OF BALL & FALCONER FUNERAL HOME LTD. Manager Director Director C. D. 1)enomme M. S. Falconer 527-1142 'MFS. 'MARY CATHERINE 'MCIVER of Seaforth died on Fri- day, March 10, 1989. Funeral mass was held at St. James Roman Catholic Church, Seaforth on Monday, March 13, 1989. 'PORK BACK RIBS LB. 2 59 DELI SLICED, BONELESS SMOKED CHICKEN BREAST LB. 4 e 79 BLADE or SHORT RI ROAST LB .8 EASTER HAMS and TURKEYS MEDIUM GROUN BEEF LB. .79 WHOLE PORK LOIN WRAPPED LB. his 3Nll�k �n1y ea:1n4tOrer r Ml r 44.hailiOntleT44inaviiifFatttitteietis Seaforth Community osp tab SE Wednesday, March 22 3:00 - 8:00 P.M. Come take the .guided tour of your Community Hospital ALL WELCOME ANSTETT JEWELLERS LIMITED r1; -4