The following text may have been generated by Optical Character Recognition, with varying degrees of accuracy. Reader beware!

THE HERALD OUTLOOK Saturday February 17 19M Page Nofault insurance Insurance bureau optimistic about new scheme The debate over Ontarios pro posed car insurance system which could come into effect as early as June is heating up Strong arguments for and against the new legislation have been presented leaving motorists wondering Will we be better off with the changes This article submitted by the In surance Bureau of Canada Is the first in a series of three exploring Ontarios car Insurance merry- goround and explaining the new program Motorists could face auto premium increases of 30 to 35 per cent Meanwhile insurance com panies are losing millions of dollars on car insurance and withdrawing from the market Some accident victims receive lotterysized injury settlements while others receive nothing And the number of accidents keeps on rising Clearly the car insurance system in Ontario is in trouble The Provincial government is aware juat how serious the pro blem is Having tinkered unsuc cessfully with the system over the past couple of years David Peter sons Liberal Party is going for broke Their latest move the Ontario Motorist Protection Plan is a com prehensive package that attacks the major factors driving up in surance costs the increasing number and cost of accidents in juries and claims At the heart of the Plan is a new insurance system that significant ly changes the way in which acci dent victims are compensated It will provide guaranteed compen sation at a level substantially higher than in the past to all acci dent victims regardless of who caused the accident In return all but the most seriously injured vic tims will give up the right to sue People ask how we could have reached the point where insurance on a car valued at can cost twice or three times the insurance on a house Insurance companies say that if you consider one of the basic prin ciples of insurance its easy to understand there must be suffi- dent income from premiums to pay claims According to Insurance Bureau of Canada the major association representing property and casual ty insurance companies in Canada the cost and number of car ac cidents in Ontario have increased dramatically over the past decade sending claims payments spirall ing Since motorists who dont have accidents help pay the losses of those who do the soaring claims have affected the cost of insurance for all consumers For many drivers premiums have reached levels which they consider simply unaffordable Insurance officials say the cost of personal injury claims has been the major contributing factor to rising costs From 1980 to 1988 per sonal injury payouts jumped by percent to billion Ontarios car insurance industry is highly competitive with over companies providing coverage for the provinces million vehicles No company has more than a per cent share of the business DENTURE THERAPY CLINIC TH Denture Therapist 72 Mill St Georgetown 8778974 102 East Or Bramalea Comer East Or In the early 1980s when high in terest rates were providing unusually high investment income insurance companies were able to increase their competitive edge by delaying premium increases But in the mid1980s Ontario like many other North American regions began to experience a car insurance crisis Interest rates nosedived and car insurance premiums climbed sharply as the industry tried to keep pace with rising accident costs Public complaints grew as costs and rates continued to soar and in April the Provincial govern ment stepped in It froze all premium rata and set up a regulating body the On tario Automobile Insurance Board OAIB to investigate the situa tion and determine fair rates for the distance driven annually and the motorists driving record Both the new premiums and the premiumsetting criteria were to be introduced on June 1 Then in a surprise move just six weeks before the legislation was due to come into effect the govern ment did an aboutturn Removing age and sex as rating criteria meant that young men the drivers with the most accidents would pay less for their insurance and practically everyone else would pay more Realizing the extent of upheaval the new criteria would have on premiums some people would have been hit with increases of over per cent the government put the program on hold It was back to the drawing board ontarios soaring Car Accident Costs PROPERTY DAMAGE CLAIMS BODILY INJURY CLAIMS 1980 1988 06 Billion 12 Billion 1980 03 Billion 13 Billion The OAIB delivered its report in July 1989 and everyone waited for the governments response Finally on September the government announced the pro gram now in the process of being implemented the Ontario Motorist Protection Plan The present car insurance system isnt only hurting con sumers Insurance companies say they have lost approximately billion over the past four years on Ontario car coverage In 1988 alone they claim to have lost a total of million even after including In vestment income Many companies have limited their exposure in highrisk areas such as Metro Toronto Others have withdrawn from the market altogether With the situation this bad can the governments new plan work Jack Lyndon president of In surance Bureau of Canada is op timistic He says the proposed system isnt what the industry would have recommended but its much better than the present system The present system clearly en courages injured parties to resort to lawsuits and to try to get as much compensation as they can The increasing size of court set tlements the cost of hiring lawyers and pursuing litigation and the ex pense and delay Inherent in an adversarial system all have a tremendous impact on the cost of car insurance Lyndon added Personal injury lawsuits have become big business for the legal profession Of the billion paid out In in claim settlements over million went to lawyers Last year that figure rose to over million By limiting the number of lawsuits the new insurance system will reduce legal fees by some per cent thus enabling more money to end up in the hands of victims Cost isnt the only impact of the current system of court set tlements Its also slow unpredic table and inequitable Many people injured in automobile accidents today receive meagre compensation because they cannot prove that another driver was at fault Others often those who can afford the best lawyers and can afford to wait out the legal process may receive lottery style settlements The governments new plan ad dresses the major shortcomings in the present system itll stabilize costs and premium increases pro vide guaranteed compensation to all accident victims ensure fast payments within to 30 days of filing a claim and help contain the number of accidents Car insurance became a major issue during the September 1987 provincial election The NDP ac cused the Liberal party of mishandling the issue and called for government run car insurance while Libera leader David Peter son promised the electorate that he had a plan to reduce premiums In 1988 while the OAIB was preparing to conduct public hear ings the government recognized that claims costs were still soaring and approved two interim rate in creases of per cent After months of hearings the OAIB in February announced new premium rates A ben chmark rate was established and companies were permitted to charge up to nine per cent more than the benchmark rate or as much as per cent less The government also required to OAIB to implement major changes to the criteria used for setting in dividual premiums The use of age sex marital status or physical handicap as criteria would be for bidden Instead the main criteria would be the type of vehicle where it was insured what it was used At the instruction of the govern ment the explored the costs and advantages of three forms of nofault insurance This is a system that compensates car acci dent victims regardless of whether they caused the accident but restricts or eliminates their right to sue for additional compensation Passive Reducing Exclusive Ladies Salon Paraffin Wax Manicuic 8734907 Rear entrance Georgetown For All Your Fine China Silver Crystal MAIN ST MILTON SAME DAY TAX RETURNS St 8772217 Fashions for The Young At Heart 115 MAIN ST S GEORGETOWN from Kiwi Church British Bakers CAKES for all occasions British Breads Pastries J 8770596 330 Guelph St Georgetown COUNTRY VIDEO GAMES r COUNTRY RANGE PUTT COUNTRY FROZEN YOGURT COUNTRY LOBSTER COUNTRY CRAFTS I COUNTRY BAKERY ENJOY A DRIVE IN THE COUNTRY Com Oil Lin and HI lid J CiimilrTnsS Good service good coverage good price- Thats State Farm insurance St Georgetown 8731833 Like a good neighbor State Farm is there STATE FARM INSURANCE SPECIAL EXTENDED THROUGH FEBRUARY PERM SPECIAL SAVE Reg 6000 On This Month SPIRAL WRAP ACRYLIC NAILS EAR PIERCING NOW AVAILABLE Coll Today For Your Appointment SAVE 20 60 Regular BO 235 GUELPH ST BESIDE BURSER KING M Mr SERVICE HUT U TO TOW HEUr