The recently released report of the Ontario Trial Lawyers’ Association (OTLA) seems to have created quite a stir. Issued by the Schulich School of Business but commissioned by the OTLA, the report estimates that drivers have overpaid for auto insurance $3 to $4 billion between 2001 and 2013 – and $840 million alone in 2013. They allege that insurance premiums have been much too high and that there is room to reduce insurance rates.
How does this overbilling happen? The Insurance Bureau of Canada, an association that represents Canada’s private home, auto and business insurers, says blame it on the personal injury lawyers. “In 2013, lawyers received an estimated $500 million from injury claimants out of their insurance settlements for bodily injury claims,” the IBC said in a release. The IBC claims that one way to reduce overbilling is to encourage personal injury lawyers to lower their fees. Personal injury lawyers often receive a portion of the settlement ordered for automobile accident victims. The IBC’s view is that the higher the portion demanded, the higher the insurance premium, driving up the cost for consumers.
However, without a lawyer, you may not receive the compensation or care you need during your recovery. We highly recommend speaking to a lawyer immediately if you’ve been in an accident.
The OTLA has appealed to the government to have the auditor general investigate auto insurance in Ontario as well as reduce the profit gap. The government has responded by saying that automobile insurance premiums have been on the decline in the past few years. That said, the Liberal government has promised to cut auto insurance rates by an average of 15% from where they were in the summer of 2013 by as early as August, 2015.
Finance Minister Charles Sousa’s press secretary Kelsey Ingram wrote in a statement that “Our government is always looking for ways to continue to reduce rates and fight fraud in the auto insurance system.” She added, however, that it is not in the auditor general’s jurisdiction to review private companies.
