Registered insurance brokers offer independent advice and Property & Casualty (P&C) insurance products from a variety of companies. Brokers must be licensed by the Registered Insurance Brokers of Ontario (RIBO). All RIBO licensees must carry an errors & omissions policy, as well as a fidelity bond, which is designed to provide customers coverage in the unlikely event that a broker mishandles their premiums. RIBO licensees are required to follow the RIBO Code of Conduct, which establishes rules and standard of professional conduct.
As a customer, you have the right to professional advice from a broker who is well informed about the products they are selling. You have the right to be treated with fairness and integrity.
How Insurance Works – You have the right to be informed about how your insurance premiums are calculated. You have the right to access your policy and be clearly informed about the coverage and the claims settlement process.
Broker Compensation – You have the right to ask how a broker is paid, the insurance companies they represent, and be informed about any potential conflicts of interest the broker may have. All RIBO licensed brokers must disclose commission information at the point of sale which outlines how they are paid.
Understand Your Insurance Needs – You should consider your insurance needs and prepare relevant questions before you talk to a broker. Ask yourself if there have been changes in your personal or business life that could impact your insurance needs. Make sure you provide a detailed and accurate explanation of your circumstances to your broker so they can provide informed recommendations that meet your needs.
Insurance Quotes – When obtaining a quote, your broker should always present the best value products available based on your current needs, and document why certain coverage and product options, including lower cost options, which may or may not be appropriate for you. Brokers are also expected to comply with the Take-All-Comers rule. For more information on buying auto insurance and the Take-All-Comers rule, visit here
Personal Information – You have the right to understand how your personal information is used and protected. Ask for a copy of the privacy statement from your broker and the insurer.
Customer Obligations – You need to ensure that you know and understand your obligations under your insurance policy. For example, your policy will require you to provide updates to your broker and insurer regarding any material changes in your circumstances.
Insurance Claims – If you need to file a claim, you have the right to be informed about the procedures and typical timelines for settling your claim, and you may inquire about the status of your claim throughout the process. If your claim is denied, you have the right to an explanation as to why it was denied. Your broker is your advocate as you work through your claim with the insurance company and will liaise as required.
Making a Complaint – You can submit a complaint to RIBO if you believe your insurance broker failed to comply with the Registered Insurance Brokers Act, its regulations, or RIBO by-laws. File a complaint here
OmbudServices – In the event you have an insurance claim, your broker will provide you with information about the insurer’s claims process. For any unresolved disputes with an insurer, you may contact the insurer’s Ombudsman, who will attempt to resolve the conflict. If the conflict is not resolved, you will be referred to the General Insurance OmbudServices for P&C insurance.
Convincing someone that they could have more coverage than they do now – often for less money – should be a slam dunk. Right? That’s exactly what personal umbrella policies offer. So why aren’t they more popular? Let’s break it down and review tips for how to talk to your clients about the importance of personal umbrella coverage.
The definition
A personal umbrella policy provides additional coverage when a client’s base liability coverage is exhausted. It covers legal fees and loss of income associated with liability claims – even for incidents that occur outside of Canada.
The challenge
Coverage that protects property is an easy concept for clients to buy into. It’s straightforward to understand and is often mandatory. The need becomes less clear when it comes to coverage that protects against legal action.
Many clients associate liability with businesses or high-income earners. The reality is that most of us are targets for legal recourse, even when going about our regular, low-risk lives. Pet owners, social media users, people who do volunteer work… wealthy or not, these people are all vulnerable.
Trends suggest that Canadians are becoming more litigious, and court cases are resulting in larger payouts. And while lawsuits don’t directly result in the loss of the ‘things and stuff’ protected by standard personal insurance policies, people could indirectly lose assets if they need to come up with the cost of an unexpected settlement.
Finally, when you consider the modern hazards that impact our safety (e.g. texting while driving), it’s hard not to appreciate how unpredictable an everyday task can be – or how far a resulting lawsuit can go.
Start with a conversation
Get to know your clients. Sincere engagement does wonders for customer loyalty, and it has the side effect of revealing important insights. For example, do they:
•Have children?
•Have hobbies?
•Do volunteer work?
•Travel frequently?
•Own rental properties?
•Use social media?
Clients who answer ‘yes’ to any of these questions are candidates for personal umbrella coverage. What’s holding them back? Awareness is a major factor. But once you resolve that…
Overcome the “it won’t happen to me” mentality
There’s a misconception that court battles are the stuff of TV dramas. In many people’s minds, their ‘boring lives’ are enough protection. Here are four relatable scenarios to share with your clients to demonstrate how a personal umbrella policy could save the day:
1.Social Media. Personal umbrella coverage protects against libel, slander and breach of privacy. The level of confidence internet users feel when posting from ‘behind the keyboard’ makes it too easy to broadcast messages to hundreds or thousands of people. All it takes is one person to retaliate; whether it’s the proprietor of a restaurant who receives a defaming review, or the parent of a child whose photos are shared.
2.Teenagers. They’re maturing and finding their independence, which is exciting for parents to see. What can be concerning is the fact that they don’t fully understand the scope and potential impact of their behaviour. And if a dependent is responsible for a damaging action or breach of privacy, the parent may be responsible.
3.Mandatory or not, auto accidents are so common that it’s undeniably smart to have this coverage. But base policy limits are relatively low considering the potential damages. When someone is at fault for a collision involving multiple vehicles – especially if any of the victims experience loss of future income or require long-term care – their standard coverage gets eaten up quickly.
4.Hosting events. Small get-togethers involving close friends and family appear low-risk at first glance. However, unpredictability increases when you add variables like alcohol, pets, or small children. We hope our loved ones wouldn’t sue, but in cases where compensation is needed, the decision to pursue legal action becomes less personal and more about necessity.
A personal umbrella policy is often more affordable than increasing liability on each individual base policy, and it protects the actions of your clients and their families wherever they are in the world. As sensibly as we might go about our lives, we are all subject to the unpredictability of other people’s actions.
The bottom line for your clients; our world is evolving, so the way we protect ourselves must change too.
Ontario approves electronic proof of auto insurance Canadian Underwriter Ontario approves electronic proof of auto insurance
Ontario’s Minister of Finance, Rod Phillips (centre), announces the approval of electronic pink slips in Ontario
The approval, announced Thursday morning by Ontario’s Minister of Finance, Rod Phillips, follows the lead of Alberta, Newfoundland and Labrador and Nova Scotia. Nova Scotia was the first province to approve electronic pink slips in January 2018, followed by Newfoundland and Labrador in July 2019 and Alberta last month.
Speaking at a press conference at a CAA South Central Ontario store in Markham, Phillips said there will be a one-year phase-in period, during which time insurers will continue to issue paper versions as well as electronic versions for customers that request that option.
“This period will also [allow] consumers, regulators, insurers and law enforcement – all groups that we’ve consulted with extensively on this – [to] see if there are any changes that are necessary to make this program better,” Phillips said during the press conference. “Rummaging through your [glove compartment] for your little pink slip is not something that should be necessary in 2019.”
The electronic pink slips in Ontario will feature “sophisticated safeguards,” Phillips said. “They can’t be edited or altered. Features cannot be included to enable anyone to track your location or collect, use or disclose your data without explicit permission from you.”
The approval of electronic pink slips in Ontario was a long time coming.
As early as December 2015, Fasken Martineau DuMoulin LLP and the Centre for Study of Insurance Operations (CSIO) advocated for EPAI in the eSlips Advisory Report: E-Delivery of Motor Vehicle Insurance Cards. In the wake of that report, the Canadian Council of Insurance Regulators launched consultations in the spring and summer of 2016 regarding the adoption of EPAI.
In the interim, some brokers were already offering versions of EPAI, even though Ontario had not yet created a regulatory framework for them. CSIO had an industry-based solution ready to launch in June 2017.
After Nova Scotia approved EPAI in January 2018, Canadian Underwriter approached the provincial regulator – the Financial Services Commission of Ontario, and now the Financial Services Regulatory Authority of Ontario – for regular updates on the EPAI file. When last contacted in early August, FSRA said that it was continuing “to work with the government and stakeholders to enable the use of electronic pink cards for consumers. We have no further updates at this time.”
Ontario’s budget in April 2019 indicated that it would bring EPAI to Ontario drivers and allow for “more competition in the auto insurance market.” Earlier this year, the government commissioned a poll of Ontarians about ways to make auto insurance more accessible, more affordable and more convenient, Phillips said. Fifty-one thousand people provided comments, including 68% who said that they believe insurers needed to provide them with more options in terms of online and digital tools.
Ontario has become the fourth province in Canada to approve the use of electronic proof of auto insurance (EPAI) for drivers, effective immediately.
Phillips said the government needed to work with insurers, consumer groups such as CAA, law enforcement, and officials and experts in privacy. It also consulted with the other provinces that approved EPAI. “It took us that time to make sure it would be done right.”
Insurance Bureau of Canada welcomed the news. “Being able to provide digital documents to today’s tech-savvy consumer is a baseline expectation of service we are thrilled to now be able to provide,” Kim Donaldson, vice president of IBC’s Ontario region, said in a press release. Most U.S. states also allow digital proof of insurance, “and we anticipate more provinces will follow suit in the near future.”
Canada’s largest insurer, Intact, announced Thursday an enhanced digital proof of insurance (pink card) on the Intact Insurance and belairdirect apps. The digital pink card can be used in Quebec, Alberta, Newfoundland and Labrador, and Nova Scotia, and “in Ontario following review of the regulations released today,” Intact said.
Aviva Canada, Canada’s second-largest insurer, applauded the government’s decision to approve the use of electronic pink slips and talked of moving onto the next phase. “We continue to meet with other governments and regulators in order to advance eSlips approval in their provinces,” said Phil Gibson, managing director of personal insurance at Aviva Canada.
“Offering a paperless option is the next step in modernizing the auto insurance industry and a move welcomed by CAA and its members,” said Matthew Turack, president of CAA Insurance. “In a recent survey conducted for CAA Insurance, nearly two-thirds of respondents expressed interest in having access to electronic proof of their auto insurance coverage.”
Added CSIO president and CEO Catherine Smola: “The recent announcement of the Ontario government’s decision to approve the use of eSlips is what consumers have been waiting for and we are thrilled with this news. The benefits of eSlips are tremendous and now carriers and brokers can give their customers the experience they expect, allowing them to access their proof of insurance on their phones, anywhere, anytime.”
Auto physical damage (PD) losses were on the rise in the first quarter of 2018—particularly in Ontario.
According to MSA Research’s latest Quarterly Outlook Report, the overall private passenger PD direct loss ratio hit 106.1% in the province in Q1.
While the Greater Toronto Area did experience more snow in the first quarter of 2018—21 cm more compared to Q1 2017—MSA also points to the rising cost of repairs, distracted driving and repair shop fraud as other contributing factors.
Most insurers experienced worse results in Q1 2018 compared to Q1 2017, and those that saw improvements still had high loss ratios. Notably:
AIG went from a direct loss ratio of 64.2% in Q1 2017 to 97.9% in Q1 2018
Aviva Canada went from a direct loss ratio of 83.3% in Q1 2017 to 105.2% in Q1 2018
Certas Direct went from a direct loss ratio of 85.6% in Q1 2017 to 121% in Q1 2018
The Guarantee went from a direct loss ratio of 78.7% in Q1 2017 to 119.5% in Q1 2018
RSA went from a direct loss ratio of 61.2% in Q1 2017 to 103.3% in Q1 2018
MSA suggests that offering a premium discount to drivers who agree to be restricted to preferred shops for auto repairs—a measure that might require regulatory changes—could help reduce fraud.
Alberta had a 58% increase in distracted-driving accidents
Insurance claims related to distracted driving are on the rise, according to claims data released by Aviva Canada on Monday.
From the start of 2016 through March 2018, the insurer saw distracted driving claims increase by 23% across Canada. Accidents related to distracted driving went up by 58% in Alberta, 34% in Quebec, 18% in the Greater Toronto Area and 8% in Atlantic Canada.
“The majority of these accidents are preventable—such as hitting stationary objects, rear ending other vehicles and inattentive lane changes,” Phil Gibson, Aviva Canada’s chief underwriting officer, said in a news release.
To help combat distracted driving, Aviva has launched its Undistracted Driving campaign, and released this video.
Last fall, Aviva published a poll that showed texting and driving makes 95% of Canadian drivers feel unsafe. Eighty-eight percent of respondents said they had witnessed other people on the road texting and driving.
The jury is out on the Ontario government’s latest plan to cut rates and reduce fraud in the province’s troubled auto insurance system.
The Fair Auto Insurance Plan, unveiled last December by Finance Minister Charles Sousa, committed his administration to a number of fresh initiatives, just months ahead of an expected election.
Gordon Rasbach, vice-president of legal and fraud management at Aviva Canada, says he’s encouraged by the plan. Still, as a former police officer, he’s inclined to cast a skeptical eye on the announcement—and not just because of its timing.
“It amounts to a recognition of the problem, and an intention to act, which is something that we have wanted for a long time,” he says. “My concern is that we have had previous expressions of intent and cause to be excited.… But the action doesn’t always follow.”
Back in 2013, the governing Liberals promised to reduce auto insurance rates by an average of 15% across the province within two years as part of a budget deal. But the 2015 deadline came and went, with the rate drop only approaching halfway to the target.
That prompted Premier Kathleen Wynne to claim the 15% mark was always a “stretch goal,” but by the end of 2017, the target had edged further out of reach, with rates just 5.5% lower than 2013.
“When a good part of your practice is devoted to providing assessments for insurance companies, you end up trying to impress them with denials.”
In the meantime, a report by David Marshall labelled the province’s regime “one of the least effective in the country.” Marshall, the former CEO of the Workplace Safety and Insurance Board, delivered his withering assessment in April 2017 after finding that the average Ontarian paid an annual insurance premium more than 50% higher than the national average of $930.
In response, the province adopted a number of his recommendations in its latest plan, including the development of standardized treatment plans for common, less serious injuries; independent assessment centres for those at the severe end of the injury scale; and a Serious Fraud Office (SFO) to investigate and prosecute organized cheats.
Pete Karageorgos, the Insurance Bureau of Canada’s Ontario director of consumer and industry relations, says the Marshall report resonated with its members, particularly for its comprehensive nature, which he says represented a departure from recent approaches to change within the industry.
“Every few years, we’ve been getting a new set of minor reforms and updates,” Karageorgos says. “Assuming that this plan is implemented, hopefully we can finally set aside all the tinkering and get on with providing an insurance product that helps those people who are injured in crashes to get the services they need to get them back on their feet quickly.”
“There have been a lot of band-aid solutions,” adds Brian Purcell, the president of the Insurance Brokers Association of Ontario. “On paper, this plan looks good, and we’re confident that the solutions they are proposing will work.”
81% percentage of Canadians who believe that increases in auto insurance premiums are tied to fraud.
Source: Crash, Cash and Backlash: Aviva Fraud Report 2017
$547 million the amount auto repair fraud costs Ontarians annually.
Source: Aviva Canada
Tackling fraud
Acknowledging that fraud costs consumers as much as $1.6 billion per year, Sousa said in a news conference that previous efforts to lower premiums had not gone far enough, and that auto insurance fraud had “become an industry.”
At the heart of his plan to crack down on the problem is the SFO. The dedicated office, which was also recommended by a previous anti-fraud task force in 2012, would combine investigative and prosecutorial resources to go after serious systemic cases.
“When someone cheats, we all pay. That’s something we’ve highlighted for a long time, and that finally has to be addressed,” the IBC’s Karageorgos says.
But Rasbach is not convinced that the SFO alone can do the job.
“Of course it’s a step in the right direction, but you need to get to the root cause of fraud, and the SFO is not going to do that. It’s going to be there to address the symptoms of our broken system,” he says.
By focusing on the most serious cases after they’ve had the opportunity to fully develop, Rasbach says that the best-case scenario for the SFO will see it skimming a few of the worst offenders off the top, while the bulk of the offenders continue to thrive in the cesspool of corruption below.
He says Ontario’s system is riven with fraud, split mainly between those in the business of treating injured claimants, and those who deal with damaged vehicles.
Rasbach calls for a more coordinated approach that will see the governing bodies for lawyers, healthcare providers and other professionals identifying rogue operators within their ranks.
“Then they have to mete out discipline as they find breaches to their codes of ethics,” he says. “Regulatory bodies need to take much greater responsibility in understanding their own members’ role in all of this.”
Insurers, too, have a part to play, according to Rasbach. He says providers who are opaque about their own fraud detection efforts are preventing the industry from getting ahead of the issue.
“We’re probably the only country in the Western world whose regulators don’t compel insurers to report fraud,” he says. “Some will do so voluntarily as part of their business practice, but many don’t, and the result is that nobody really knows how big this problem is.”
The lack of communication between insurance providers also allows bad actors to avoid detection for longer, Rasbach explains.
“If you’re in one of these supply chains habitually reaching into insurers’ pockets, and one takes issue with you, then you can just move on to the next. In the end, consumers are left high and dry because they are the ones paying,” he says.
Aviva recently released its own report, pegging the cost of fraud to Canadians at $2 billion per year. Rasbach hopes to make it an annual report in an effort to raise awareness of the problem.
“Until people start to realize how broken the system is, it’s going to stay that way,” he says.
Rasbach says he draws hope from another element of the provincial plan, which enacted Marshall’s recommendation for the establishment of a new independent regulator for the industry. Legislation has already been drawn up to create the Financial Services Regulatory Authority (FSRA) of Ontario, a rule-making body set to launch in April of 2019.
Dealing with the seriously injured
Marhsall’s report also expressed frustration that consistently plunging accident and fatality rates on provincial roads have not been matched by a concomitant fall in claims costs. In fact, a system “filled with disputes and inefficiencies” was driving expenses in the opposite direction, with a large portion of premiums “being used to pay experts and lawyers,” rather than flowing to injured people, he concluded.
The standardized treatment plans and independent assessment centres for seriously injured parties proposed by the provincial government emerged from Marshall’s “care not cash” prescription for fixing the auto insurance system, which he argued would shift the focus to the needs of patients.
But the ideas have raised a stink among personal injury lawyers, who say their clients have already paid the biggest price for the modest reductions in premiums since 2013.
Amendments to the Statutory Accident Benefits Schedule enacted in 2016 resulted in a series of cuts, including entitlements for “catastrophically impaired” individuals, the group of accident victims with the most life-changing injuries. The legislative changes slashed the combined limit for attendant care and medical rehabilitation services in half, from $2 million to $1 million.
Darcy Merkur, a partner at Toronto personal injury boutique law firm Thomson Rogers, says that he supports the idea, in theory, of a binding-decision maker to settle disputes over the reasonableness of medical care.
“The problem is who they’re going to put in charge of running these assessment centres,” Merkur says. “If you had frontline treatment providers who understand the importance of access to treatment, that would be one thing, but all the indications are that assessors will be picked by an insurer-focused committee.
“When a good part of your practice is devoted to providing assessments for insurance companies, you end up trying to impress them with denials,” he adds.
In addition, Merkur worries the independent examination centres proposed by the provincial government sound suspiciously like the old Designated Assessment Centre system that was abandoned in 2005 for adding bureaucracy and cost to the system.
“Instead of better care, I think we’re going to end up with less care,” he says.
Rick Orr, a former president of the IBAO and the principal at Orr Insurance Brokers in Stratford, Ont., says his chief worry about the examination centres is that there are enough of them dotted throughout the province to prevent his customers and others in rural settings from being forced to drive long distances to get assessed.
“There have been a lot of band-aid solutions. On paper, this plan looks good, and we’re confident that the solutions they are proposing will work.”
“I can see the merit in these centres, but it’s access that concerns me. If a client of mine is injured in winter, how are they going to get themselves seen?” Orr says. “Sometimes, an idea takes hold in Toronto, but they forget to think about the rest of Ontario.”
The province’s promise to conduct a rate-factor review has also raised red flags for rural brokers such as Orr.
One of the factors identified for study in the provincial plan is geographic territories, “to ensure that people in certain parts of the province are not subject to unfairly high rates.”
“As someone who’s not in greater Toronto, that sounds like a horrible idea. If Ontario became one geographic territory for the purposes of rate setting, their premiums might come down by 25%, but everyone else’s would be increasing by the same amount,” Orr says. “If you choose to live where all the accidents are, you should pay for that.”
IBAO president Purcell, whose brokerage serves the small community of Spencerville in Eastern Ontario, urges the new FSRA to proceed cautiously when it comes to rate setting.
“Any big change can be very disruptive,” he says. “We have had a very competitive auto insurance market for the last few years, which has been a great benefit to consumers, and we don’t want to upset that by altering regulation practices too abruptly.”
Direct loss ratio hit 106.1% in Ontario
Alberta had a 58% increase in distracted-driving accidents
The jury is out on the Ontario government’s latest plan to cut rates and reduce fraud in the province’s troubled auto insurance system.