Well-Informed Means Savings

Minister Mike Colle responds to concerns about unfair car insurance costs in Ontario

Every insurance policy includes many variables that raise or lower its cost. If one is to determine how much a user is supposed to pay, the key is obtaining information, and avoid the pitfalls of high prices."
This statement comes from Mike Colle, undersecretary of Ontario's Finance Ministry. The Government entrusted him with the uneasy task of unravelling the insurance tangle. He never tires of repeating that the same coverage is available on the market at very different prices, and that people can save thousands of dollars simply by shopping around.
Clearly, the companies - better yet, the brokers - do not help users understand the market, because that would run against their own interest. But citizens must follow a new path, breaking the cycle of continuous unjustified fee hikes. They must get better information and avoid defeatist remarks like "there's nothing we can do anyway."
"On the contrary, there's a lot we can do," counters Mike Colle, "and one way to save consists in tapping the offers that companies make directly to some groups, bypassing brokers."
Information becomes paramount, and in the pursuit of savings people even resort to letter writing. The following was sent to our newspaper, and Mike Colle accepted to reply to it.
"Mr. Editor: I refer to your article published on February 1, about Age-Based Discrimination.
"Being over 75, I belong to the category of seniors discriminated against, and over the past three years my fees increased by almost $300 a year. What I would like to add to your article is the penalization that some users suffer due to their area of residence within the City of Toronto.
"Let me explain. Last year, quite upset after receiving notice of a $274 increase despite my spotless driving record, I discussed my case with a friend of mine who happens to be an insurance broker.
"My friend's first question was, 'Where in Toronto do you live?' I replied, 'North Etobicoke.' 'Well, there you have it. That area,' he told me, 'has the highest number of collisions. Regardless of clean driving records, drivers get penalized in comparison to other areas in Toronto.'
" 'Excuse me?' I asked him. 'What have I got to do with other people's accidents?' 'Don't ask me,' he replied. I insisted, 'If I were to change my insurance company, would that make any difference?' 'No, it wouldn't,' he said.
"I pressed him further, 'Could you help me in any way?' He was forced to admit, shamefully and embarrassingly, 'No, I couldn't. It's useless.'
"That's not enough. In my opinion, citizens have a sacrosanct right to know whether insurance companies have really had a free hand in penalizing drivers who did not break any rule. If there was abuse, can a user sue an insurance companies?
"I'd like an explanation. Thank you and best regards.
Fulvio Florio, North Etobicoke"

Mr. Florio's letter raises many issues, and our publications are committed to addressing them with the help of pertinent experts and politicians. In this case, in order to address Mr. Florio's questions we enlisted the help of Mr. Colle.
"The first problem is a real classic. Asking a friend or any one person for information is an old-fashioned and flawed system," said the undersecretary. "As we said before, one needs to hear many more opinions, and then decide. Second, in cases of alleged injustice such as the one you denounce, two avenues can be followed, and their name is Ombudsman. These are consumer protection services offered both by the companies and by the Government.
"In the case of insurance companies, they have an internal office with people responding to consumer complaints trying to resolve controversies. If consumers do not find satisfaction there, the Government of Ontario has its own office dealing with such controversies.
"We don't know the name of your company, so we cannot give you any specific indication, but we can tell you how to find the right office and person in charge."
"Using the Internet," continues Colle, "go to www.fsco.gov.on.ca; click on Fsco ombudsman; choose Insurance among the various alternatives offered; there you find How to file a complaint; on that page you find Consumer complaint officers, which gives access to a directory called contadd.pdf.
"This directory lists all companies with their addresses, phone numbers, and names of the person in charge. This service is offered by the Ontario Finance Ministry.
"If you cannot obtain satisfaction from them, you can ask the Government: Office of the Insurance Ombudsman, 5160 Yonge Street, 4th Floor, P.O. Box 85, North York, Ontario M2N 6L9,Fax 416.590.8480."

Publication Date: 2004-02-15
Story Location: http://tandemnews.com/viewstory.php?storyid=3638