Yesterday I received my annual statement for automobile insurance from Travelers, a division of the Dominion of Canada General Insurance Company based in Toronto. Despite no tickets last year and no claims, my premium had risen approximately 30%.
Regular readers will not be surprised that I kicked up some fuss over this. I was particularly upset because no one could tell me why this had happened.
My insurance broker sounded apprehensive, like meat in a sandwich. Not their fault. So I contacted Travelers to get an explanation. Today I received a call from a representative, Linda Kerel.
“Well,” she said, “we’ve changed our rating system.”
“To obtain a 30% increase in profit,” I suggested.
“No, when we changed over, some had lesser increases, some even had decreases,” she offered helpfully. “Yours just happened to be on the high side.”
“That’s not an explanation,” I said. “Why was mine raised so much?”
“It’s an individualized rating system,” she said. “We used to rate on six factors. Now we rate on more than forty.”
“That’s not an explanation,” I repeated. I will confess to sounding exasperated at this point. “What factors under the new system led to a 30% increase in the premium?” “I’m afraid I can’t tell you that,” she said. “I have no idea.”
At which point I hung up.
Ontario Premier Kathleen Wynne promised in 2013 that premiums would actually fall, but conceded a few weeks ago that this was a “stretch goal.” I’d have to agree. My broker, meanwhile, ferretted around and gave me the bad news: all the other insurance companies, supposedly in competition with each other, would charge me almost the exact-same premium. What we have here, in fact, is a cartel system, with zero transparency.
This gouging was, de facto, approved by the Financial Services Commission of Ontario, a creature of the Ontario government. But be assured they don’t look at individual cases, only averages. The devil, it seems, is in the numerical details, which, for whatever reason, Travelers refuses to provide.
Some folks have been calling for a public auto insurance scheme for quite a while now. It was, admittedly, never my issue. Bob Rae reneged on it when he was premier; I just shrugged. But I’m not shrugging now. In fact, I would go further. How do we know that private insurance companies aren’t scamming people left and right for all the insurance products they sell?
We don’t, of course. But we do know that they make vast profits. There is really only one answer: nationalize the insurance companies, run a not-for-profit public system, and make sure it is completely transparent.
In the meantime, I have a complaint lodged with Travelers’ Ombudsman. But I’ve been around the block a few times. If anything comes of this, I’ll let people know: but don’t bother staying tuned.