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Insurance

COVID-19

When the pandemic first hit, Canadians drove much less than they did before.  Americans drove less too.  The main difference is that many insurers in the USA voluntarily lowered insurance premiums, at least for a while.  Their reasoning was quite simple: fewer people were driving and, when they did have to drive, they were driving less so claims and payouts dropped dramatically.

In Canada, with very few exceptions, there was no such voluntary assistance.  You either called up and begged for a discount while you couldn’t work and your car gathered dust, or the insurance company just quietly kept charging you the full rate.

And it isn’t just the auto insurers that benefitted by taking in the same amount of money while paying out much less.  Many businesses are seeing massive spikes in their insurance rates as the COVID-19 pandemic continues.  But don’t worry, the governments have a solution! 

No, it doesn’t involve lower rates so it won’t help consumers and businesses. Rather these governments plan to pass legislation that will restrict a person’s right to sue a business for COVID-related claims.  This should result in reduced litigation and payouts on existing policies, which unfortunately only benefits the insurance companies that are still charging those huge rates.

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Whether you love it or hate it (we don’t actually know anyone who loves it), insurance is one of those unavoidable expenses.  While you can seemingly insure just about anything these days, most of us will probably stick to the more common insurance for things like our health, our home, our cars, and our lives. 

Governments to the rescue (of insurance companies)

Unlike the banks, the airlines, and the cellular phone companies in Canada, there actually appears to be some level of competition in the industry, as evidenced by the wide range of rates available at any one time.  The issue, then, is not so much a lack of competition as it is government-assistance to the industry in the form of changes to laws that tend to favour the insurance industry by helping them save money at the expense of Canadians.

The auto insurance industry, as one example, is a regular beneficiary of such legislation.  Provincial governments (provinces are responsible for most insurance in Canada) have repeatedly changed the laws around injury claims in order to restrict lawsuits and claims.  Those governments claim this will help stabilize insurance rates that would otherwise have to increase due to an increasing number of injury claims.

Who really benefits

In reality, however, do the rates ever stabilize or do they just keep going up? (hint: they keep going up)  For that matter, do the insurance companies that benefit financially from changes to the law pass those benefits on to Canadians? (hint: no…no they don’t).

There are arguments on both sides, but if increasing insurance rates, or decreasing levels of service, or both for that matter, are things that affect you, it is important to make your concerns known.

What can we do?

Take Action

We can start by expecting more. Once we have made that shift in our thinking, and we realize that we deserve more, then we can get together and demand more.

Connect with other Canadians, and demand more from your elected officials, who are the only ones with the power to force the changes we want.

Ultimately, it is your responsibility to tell the elected officials what you want. It is their responsibility to make it happen. Assuming, of course, they want to get re-elected.

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