| Car insurance. A recent study maintains that | | | | |
| in the good Canadian Democratic Republic | | | | The bottom line? Like other markets car |
| [D.R.] car insurance rates are only 30% | | | | insurance needs to be free of |
| higher than in the US, and only, [in the | | | | over-regulation. Some regulation might be |
| industrialized heartland of the communal | | | | necessary and some consumer protection is |
| paradise], running at $1300 per year. Sure | | | | probably needed. But what is the point of |
| they are. I don't know of one single person | | | | having in a small place like Canada, some 60 |
| amongst say 100, which has a car insurance | | | | government groups, all slopping like pigs on |
| rate that low in Canada's urban heartland. | | | | the gruel of car insurance premiums? |
| Car insurance rates are far higher than some | | | | |
| accounting 'mean' average and as government | | | | How does escalating fraud, rising prices and |
| regulation increases, so does fraud, rates, | | | | price discrimination based on sex, age, skin |
| and consumer frustration. In Canada alone I | | | | color, and location, controlled by government |
| counted 59 regulatory bodies and agencies | | | | benefit me the consumer? The average, young, |
| involved the car insurance market - am I to | | | | white, urban male is not paying some |
| believe that all of these are to protect me | | | | fictitious amount of $1300 - he will be |
| and to benefit me? Doubtful. | | | | paying double or triple that even if he has a |
| | | | good driving record. [Try discriminating on |
| Maybe 85 year-old Pastor Paul living in | | | | those criteria in the private sector - before |
| nowheresville driving a 1960 Ford tractor, or | | | | a human rights group starts beating on you, |
| a Sherman tank pays these so-called average | | | | good luck]. |
| rates. No one in an urban center under the | | | | |
| age of 60, driving anything newer than a 1988 | | | | Open up the car insurance market and watch |
| Dodge pays anything close to $1300 per year. | | | | rates and government stupidity decline. State |
| La raison? C'est simple - in most provinces | | | | ownership only leads to fraud and abuse. |
| and states, car insurance is a massively | | | | |
| regulated and government controlled market. | | | | Notes: |
| This leads to nothing but higher costs and | | | | |
| misery. Where there is government, there is | | | | ======== |
| consumer pain. | | | | |
| | | | Report by Mark Milke for the Insurance Bureau |
| Car insurance rates vary by state and | | | | of Canada |
| province and by urban and rural center. Some | | | | |
| jurisdictions have state-owned insurance | | | | Cato on the regulatory costs in the US: |
| firms providing coverage [the socialists in | | | | |
| British Columbia prefer this]; a mixed | | | | Canadian bodies involved in Car Insurance: |
| private - government regulated system [most | | | | |
| US states and Canadian D.R. provinces have | | | | 1. Canadian Insurance Industry Organizations |
| this]; or a free-market unregulated system | | | | |
| [Texas, South Carolina]. | | | | 2. Canadian Life and Health Insurance |
| | | | Association (CLHIA) |
| Guess which ones has the best rates and most | | | | |
| competitive pricing markets? Well done. Texan | | | | 3. L'Association canadienne des compagnies |
| rates for car insurance average about $800 US | | | | d'assurances de personnes (ACCAP) |
| per year. South Carolina after 30 years of | | | | |
| regulatory nonsense, went to a free market | | | | 4. Canadian Association of Mutual Insurance |
| system. Rates plummeted to $760 on average. | | | | Companies (CAMIC) / L'Association canadienne |
| Texas and South Carolina have pretty much the | | | | des compagnies d'assurance mutuelles (ACCAM) |
| lowest car insurance prices in the US. Big | | | | |
| surprise. [For teeth gnashing Marxists these | | | | 5. Ontario Mutual Insurance Association |
| low rates are of course calibrated to the | | | | (OMIA) |
| death penalty.] | | | | |
| | | | 6. Insurance Bureau of Canada (IBC) |
| It should be said that lower car insurance | | | | |
| rates are not even indicative of a good | | | | 7. Bureau d'Assurance du Canada (BAC) |
| system - but lower regulatory, bureaucratic | | | | |
| and fraud costs are. Texas and South Carolina | | | | 8. Insurance Institute of Canada (IIC) |
| have the lowest rates of fraud, abuse and | | | | |
| regulatory oversight in the US. They also | | | | 9. Institut d'Assurance Canada (IAC) |
| have real market-set prices, not government | | | | |
| managed 'ranges'. | | | | 10. Center for Study of Insurance Operations |
| | | | (CSIO) |
| For the average urban Canadian - the | | | | |
| fictitious one from the Fraser Institute | | | | 11. Le Centre d'etude de la pratique |
| study - who paid '$1300' in Toronto, the | | | | d'assurance (CEPA) |
| average big hat Texan paid $350 CDN less per | | | | |
| annum for his car insurance. There are many | | | | 12. Canadian Institute of Actuaries (CIA) |
| reasons why rates might differ between 2 | | | | |
| locations. Rate calculation factors such as | | | | 13. Institut Canadien des Actuaires (ICA) |
| age; urban density; number of accidents in | | | | |
| that jurisdiction; the number of claims in | | | | 14. Insurance Broker Association of Canada |
| that area; ethnic demographics; and | | | | (IBAC) |
| individual driving and payment history all | | | | |
| influence rates of course. Common sense | | | | 15. Association des courtiers d'assurances du |
| stuff. | | | | Canada (ACAC) |
| | | | |
| But is a driver in Dallas, a $350 per annum | | | | 16. Advocis - The Financial Advisors |
| better driver than some guy on the outskirts | | | | Association of Canada |
| of Toronto? Maybe he is, maybe the laws in | | | | |
| Texas for bad driving are tougher, maybe the | | | | 17. Canadian Coalition Against Insurance |
| Texans have a lot more of those studly | | | | Fraud (CCAIF) / La Coalition Canadienne |
| looking Highway Patrol officers on the look | | | | Contre la Fraude (CCCFA) |
| out for fast driving cowboys. Maybe the | | | | |
| average Texan drives slower than the average | | | | 18. Canadian Life and Health Insurance |
| maniacal Canadian zooming in to town on ice | | | | Compensation Corporation (COMPCORP) |
| covered roads. But then again maybe some | | | | |
| other factors are driving the differential in | | | | 19. Societe canadienne d'indemnisation pour |
| rates. | | | | les assurances de personnes (SIAP) |
| | | | |
| A key factor never covered by the media and | | | | 20. Property and Casualty Insurance |
| one which most consumers don't consider is | | | | Compensation Corporation (PACICC) |
| the cost of state interference and fraud. Do | | | | |
| you see on your insurance bill, 'taxes | | | | 21. Societe d'indemnisation en matiere |
| collected by government'? Or, 'your share of | | | | d'assurances IARD (SIMA) |
| this year's fraudulent claims'? Or, | | | | |
| 'regulatory fees paid by you to the insurance | | | | 22. Canadian Life and Health Insurance |
| industry'? Or, 'amount paid to support | | | | OmbudService (CLHIO) |
| government employees regulating the workers | | | | |
| in the insurance regulatory agencies'? | | | | 23. Service de conciliation des assurances de |
| | | | personnes du Canada (SCAPC) |
| Of course not. | | | | |
| | | | 24. The General Insurance OmbudService (GIO) |
| Like socialized health care, the costs of | | | | |
| big-mommy state regulation are never | | | | 25. Service de conciliation en assurance de |
| disclosed to the poor schmuck writing checks | | | | dommages (SCAD) |
| to insure his car. For socialist health care | | | | |
| recipients it is the same - have you ever | | | | 26. Insurance Broker Association of Ontario |
| received a statement saying, 'this is what | | | | (IBAO) |
| you paid in a health tax, and this is what | | | | |
| you consumed in health services'? Such | | | | 27. Registered Insurance Brokers of Ontario |
| transparency is not even discussed within | | | | (RIBO) |
| government regulated markets. | | | | |
| | | | 28. Insurance Brokers' Association of |
| A large component of government burden in | | | | Saskatchewan (IBAS) |
| regulated markets? All the little fees and | | | | |
| taxes included in your car insurance price, | | | | 29. Canadian Insurance Accountants |
| which are never disclosed. In almost any | | | | Association (CIAA) |
| regulated, non-market competitive | | | | |
| jurisdiction, insurance rates only go up - | | | | 30. Canadian Insurance Laws |
| they never go down. And there is very little | | | | |
| price competition between insurance vendors. | | | | 31. Insurance Companies Act (i-ii.8) and |
| | | | related regulations |
| As Doug McClelland of the Insurance | | | | |
| Corporation of B.C., which has a monopoly on | | | | 32. Alberta: Insurance Acts & Regulations |
| basic car coverage recently stated: "It's not | | | | |
| the private sector that sets the insurance | | | | 33. British Columbia: Insurance Act & |
| rates in any province, it's the regulator | | | | Insurance Corporation Act (Chapter 226-232) |
| that does." This is not entirely true since | | | | |
| in some Canadian provinces the market does | | | | 34. Manitoba: Insurance Act (I40) & Insurance |
| help set rates. But his point is valid. | | | | Corporations Tax Act (I50) |
| Across Canada and most of the US it is the | | | | |
| government that is defining the car insurance | | | | 35. New Brunswick: Insurance Act (i-12) |
| product and rate 'ranges' or tables of | | | | |
| acceptable pricing. Included in these prices | | | | 36. New Brunswick: Insurance Act (i-12) - |
| are the costs of regulating the industry. | | | | Regulations |
| These costs add up to billions each year. | | | | |
| | | | 37. Newfoundland and Labrador: Insurance Act |
| In most areas there are hidden taxes, usually | | | | (i10), Insurance Contracts Act (i12), Life |
| around 2-5% of the premiums value that are | | | | Insurance Act (i14) |
| paid directly to the government. Regulatory | | | | |
| costs to pay for the massive bureaucracy to | | | | 38. Nova Scotia: Insurance Act (Chapter 231) |
| manage the industry are added but never | | | | & Regulations (81/2000, 94/96, 142/90) |
| disclosed. In non-state owned jurisdictions, | | | | |
| car insurance firms must pass on fees and | | | | 39. Nunavut: Insurance Act |
| regulatory costs to the consumer. They are | | | | |
| never disclosed to the buyer. | | | | 40. Nunavut: Insurance Regulations |
| | | | |
| The consumer is being jerked around. | | | | 41. Ontario: Insurance Act (I8) & Regulations |
| | | | |
| Another component of your insurance price | | | | 42. Prince Edward Island: Insurance Act |
| that is never disclosed to you? Fraud of | | | | (i-04) |
| course. In the US about $8 billion in car | | | | |
| insurance fraud is committed annually - with | | | | 43. Quebec: Lois sue les assurances |
| most of it coming from highly regulated | | | | (A25..A32) et Reglements |
| states like NJ or Taxachusetts. The more | | | | |
| regulation, the less competition, the higher | | | | 44. Saskatchewan: Insurance Act (s-26) & |
| the rates, and the greater the consumer | | | | Regulations |
| fraud. | | | | |
| | | | Canadian Insurance Regulators & Councils |
| Witness New Jersey and Massachusetts which | | | | |
| had to use government power to keep insurance | | | | 1. Office of the Superintendent of Financial |
| companies in the state. Car insurers started | | | | Institutions (OSFI) Le Bureau du Surintendant |
| to flee these states for the turnpike to | | | | des Institutions Financieres (BSIF) |
| avoid massive car insurance fraud which was | | | | |
| sinking their profits. Since most insurance | | | | 2. Canadian Council of Insurance Regulators |
| companies offer a wide portfolio [house, car, | | | | (CCIR) / Conseil canadien des responsables de |
| health, disability etc.] regulated | | | | la reglementation d'assurance (CCRRA) |
| jurisdictions have the power to force | | | | |
| insurance companies to abide by government | | | | 3. Alberta: Alberta Superintendent of |
| rules. Keep in mind that many insurance firms | | | | Financial Institutions |
| do not make a healthy return or market | | | | |
| average profit on car insurance [contrary to | | | | 4. Alberta: Alberta Insurance Council |
| media reports]. | | | | |
| | | | 5. British Columbia: Financial Institutions |
| According to Insurance bureau's in Canada and | | | | Commission of British Columbia (FICOM) |
| the US, on average only about 15 % of drivers | | | | |
| made a claim or were accused of abusing the | | | | 6. Province of Manitoba: Consumer & Corporate |
| insurance system last year. Yet this varies | | | | Affairs - Financial Institutions Regulation |
| significantly depending on how much | | | | Branch |
| government is involved. In British Columbia | | | | |
| according to the Fraser Institute, 40% of | | | | 7. New Brunswick: Department of Justice - |
| drivers make a claim. Why? It is state owned | | | | Insurance |
| and rates are capped ie. subsidized by | | | | |
| someone else. In Ontario which has a quasi, | | | | 8. Newfoundland and Labrador: Department of |
| semi-market based system only 10% of drivers | | | | Government Services and Lands - Insurance & |
| make a claim. Why? They will be punished with | | | | Pensions |
| higher personal rates. | | | | |
| | | | 9. Nova Scotia: Superintendent of Insurance |
| Highly regulated industries always suffer | | | | |
| from fraud. Not paying for one's performance | | | | 10. Nuavut: Government of Nunavut |
| leads to abuse. A bad driver should pay | | | | |
| higher rates. Those rates should be based on | | | | 11. Ontario: Financial Services Commission of |
| driving history; claim and fraud history; | | | | Ontario |
| reasonable risk analysis premised on age, | | | | |
| type of car, and where he/she drives to on a | | | | 12. Prince Edward Island: Office of the |
| regular basis. In a competitive market the | | | | Attorney General - Consumer, Corporate and |
| factors that determine price will probably | | | | Insurance Division |
| average out to what is fair. In onerously | | | | |
| regulated markets the actual price someone | | | | 13. Quebec: Autorite des Marches Financiers |
| pays for car insurance, is never a real | | | | |
| market rate. Ergo all sorts of distortions | | | | 14. Saskatchewan: Financial Services |
| will occur including fraud, abuse, and people | | | | Commission - Financial Institutions Division |
| opting out of the system and stopping to buy | | | | |
| insurance altogether. | | | | 15. |