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March 3, 2016

Promise to Greatly Reduce Auto Insurance Premiums was a Stretch

When it comes to your personal finances, there is nothing better than uncovering a strategy for saving money.With many people paying more than ever for auto insurance, it can be a challenge to fit this into your monthly budget.

Last year, Premier Kathleen Wynne set a goal of cutting auto insurance premiums by 15 percent. As you can imagine, this goal excited many people. After all, 15 percent savings on auto insurance is nothing to sneeze at.

So, What Happened?

By August 2015, the Liberals had promised to reduce auto insurance premiums by an average of 15 percent, realizing that doing so could improve their standing, garner NDP support, and of course, benefit consumers.

Unfortunately, August came and went and the government was not even halfway to the 15 percent savings. According to the most recent numbers shared by the Financial Services Commission of Ontario, there was an average decrease of seven percent when compared to 2013. A nice savings, yes. But hardly 15 percent.

Despite coming up short, Wynne chimed in with the following:

“We always knew it was going to be a challenge and the good news is that insurance rates continue to come down.”

In other words, she doesn’t want consumers to be too disappointed with missing the 15 percent goal. Instead, she wants them to realize that seven percent is still a hefty decrease in premium cost.

New legislation has also been introduced with the aim of lowering costs for insurance companies, thus allowing them to pass on the savings to drivers. 

While the 15 percent target will remain in place, Wynne did not commit to a timeline this time around. With some companies having dropped rates by 15 percent over the past two years, it is the government’s hope that many others will follow as 2016 wears on.

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