Fraud and abuse still make the Ontario auto insurance system the worst in Canada

We take you now to a dark land where fraud is rife, corruption abounds and the government seems powerless. No, not some calcified dictatorship in Africa or South America. This is Ontario, home to Canada’s worst auto insurance system, a vast subculture of lawyers, health-care operators, inept regulators and gaming politicians who cannot or will not come to grips with a regulatory failure that costs motorists billions.

As the chief executive officer of one of the province’s automobile insurance firms put it, the numbers are staggering. Among Ontario’s 9.6 million motorists, there were 85,000 accident and bodily injury insurance claimants in 2014. According to the industry’s official statistics agency, the average bodily injury claim came to $143,630. By comparison, the average in Alberta is $12,785. The average accident benefit payout was $31,785 in Ontario, compared with $7,895 in Nova Scotia and $3,766 in Alberta.

Not surprisingly, these numbers — described as staggering by Karen Gavan, head of Economical Insurance of Waterloo — have left Ontario motorists carrying the cost. The average premium for auto insurance written in the province this year is $1,425, by far the highest in Canada. That’s an improvement, taking account of inflation, from the peak in 2003, but the decline barely makes a dent in the door of a regime the province has been nominally trying to fix for more than a decade.

What’s wrong? In a letter last week to Ontario Finance Minister Charles Sousa, Gavan called on the province to end the “unfettered” abuse of claims “by participants within the accident benefits claims economy.” Consider this, she said:

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