Ontario auto insurance policyholders were about four times more likely to purchase the increased death and funeral benefit than any of the other optional benefits offered under the province's reformed auto insurance scheme.
Ontario's insurance regulator, the Financial Services Commission of Ontario (FSCO), asked the largest private passenger auto insurance insurers in Ontario to complete a survey in January 2011 regarding take-up of optional benefits.
The 24 insurance companies surveyed represented 78% of the Ontario market, based on written premium.
The survey found Ontario policyholders were most likely to purchase the following five optional benefits:
• increased death and funeral (4.76%);
• increased medical and rehabilitation to $100,000 (1.31%);
• increased attendant care to $72,000 (1.22%);
• increased medical and rehabilitation to $1.1 million and increased attendant care to $1.07 million (1.04%); and
• caregiver, housekeeping and home maintenance (0.64%).
Other optional benefits purchased included indexation (0.29%), increased income replacement to $600 (0.26%), dependant care benefit (0.25%), additional coverage to offset tort deductibles (0.19%), increased income replacement to $1,000 (0.17%) and increased income replacement to $800 (0.13%).
Optional benefits were a key component of the province's auto reforms, which were implemented on Sept. 1, 2010. The reforms essentially reduced consumers' mandatory medical-rehabilitation coverage from $100,000 to $50,000 (with an option to buy back up to $100,000) and converted some mandatory benefits into optional benefits.
FSCO approached the companies in order to understand consumers' purchasing habits regarding optional coverages. The survey covered policies written between Sept. 1, 2010 and Dec. 31, 2010.
The results of the survey were published in the Aug. 30, 2011 edition of FSCO's Auto Insurance e-Newsletter, posted online.
Friday, September 9, 2011
Saturday, August 20, 2011
BC's Supreme Court orders hefty punitive damages in auto fraud ring case
British Columbia's Supreme Court has ordered fraudsters to repay ICBC more than $344,000 for claims incured as a result of an auto theft ring.
In his written decision for ICBC v. Ben-Jaafar, Justice Cullen describes how the fraud ring made phoney Alberta registration documents for stolen vehicles and resold them to legitimate buyers in BC's lower mainland in 2002 and 2003. Twenty-seven individuals and companies were named in the action.
The scheme started with the creation of false Alberta Vehicle Registration certificates (AVRC), which were used to register the various stolen or fraudulently obtained vehicles in B.C. using a false vehicle identification number (VIN), he wrote.
AVRCs were fabricated in each case because any attempt to register a vehicle that had been reported stolen in British Columbia would be caught by ICBC. The advantage of manufacturing a VIN on a forged AVRC was that the ICBC computers would not be able to reveal whether the falsely identified vehicle had ever in fact been registered in Alberta.
Other falsified documents were used to complete the process of disguising the identity of and reregistering the stolen vehicles. The vehicles being imported into BC required an inspection by a vehicle inspector who would complete a private vehicle inspection report. Then, they would be transferred from the fictitious or unwitting Alberta resident into the name of an unwitting British Columbia resident using a transfer/tax form generally used on the pre-text that the transfer was a "gift" to the unwitting recipient to avoid the payment of taxes.
There would then be a transfer of the vehicle to a real person - the ultimate owner who would pay the person or persons involved in the scheme.
Justice Cullen awarded punitive damages against the conspirators in the amount of $10,000 per vehicle and between $2,000-$3,000 per vehicle for the defendants who knowingly acquired the stolen vehicles, or who took steps to conceal the true facts from the court.
The main players in the ring received the following orders:
• Vikram Atwal was held liable for a total of approximately $113,365, together with punitive damages of $40,000;
• Jaspal Atwal was found liable for special damages of $22,931 (claims paid by ICBC), plus $5,000 in punitive damages.
• Jasraj Bains was found liable for $96,510.04 plus $40,000 in punitive damages; and
• Jagjit Gill was found liable for $68,730.67, plus $50,000 in punitive damages
In his written decision for ICBC v. Ben-Jaafar, Justice Cullen describes how the fraud ring made phoney Alberta registration documents for stolen vehicles and resold them to legitimate buyers in BC's lower mainland in 2002 and 2003. Twenty-seven individuals and companies were named in the action.
The scheme started with the creation of false Alberta Vehicle Registration certificates (AVRC), which were used to register the various stolen or fraudulently obtained vehicles in B.C. using a false vehicle identification number (VIN), he wrote.
AVRCs were fabricated in each case because any attempt to register a vehicle that had been reported stolen in British Columbia would be caught by ICBC. The advantage of manufacturing a VIN on a forged AVRC was that the ICBC computers would not be able to reveal whether the falsely identified vehicle had ever in fact been registered in Alberta.
Other falsified documents were used to complete the process of disguising the identity of and reregistering the stolen vehicles. The vehicles being imported into BC required an inspection by a vehicle inspector who would complete a private vehicle inspection report. Then, they would be transferred from the fictitious or unwitting Alberta resident into the name of an unwitting British Columbia resident using a transfer/tax form generally used on the pre-text that the transfer was a "gift" to the unwitting recipient to avoid the payment of taxes.
There would then be a transfer of the vehicle to a real person - the ultimate owner who would pay the person or persons involved in the scheme.
Justice Cullen awarded punitive damages against the conspirators in the amount of $10,000 per vehicle and between $2,000-$3,000 per vehicle for the defendants who knowingly acquired the stolen vehicles, or who took steps to conceal the true facts from the court.
The main players in the ring received the following orders:
• Vikram Atwal was held liable for a total of approximately $113,365, together with punitive damages of $40,000;
• Jaspal Atwal was found liable for special damages of $22,931 (claims paid by ICBC), plus $5,000 in punitive damages.
• Jasraj Bains was found liable for $96,510.04 plus $40,000 in punitive damages; and
• Jagjit Gill was found liable for $68,730.67, plus $50,000 in punitive damages
Canadians lack understanding of coverage and claims process: Allstate survey
Canadians are buying insurance without understanding their coverage and do not know how to make a claim when the unexpected happens, according to a survey commissioned by Allstate Canada.
Leger Marketing surveyed 1,514 Canadians, 18 years of age or older and that held either home, tenant and/or car insurance.
Findings from the survey include:
• 48% of Canadians would have their car towed following a collision without first confirming that their insurance covers the charges;
• only 18% of Canadians know that their home insurance covers them for accidental damage to someone else's property;
• 35% of young Canadians (ages 18-34) are unsure of what damages are covered by their car insurance; and
• 29% of young Canadians (ages 18-34) don't know if their home or tenant insurance covers loss from fire.
"What is clear from our survey is that Canadians are purchasing home and car insurance without taking the steps to understand what they are getting," said Saskia Matheson, Allstate Canada's spokesperson.
"While we understand insurance policies may not offer the most entertaining read, if people are not fully aware of what their coverage entitles them to or the process to make a claim, then they may not get the full benefits of the coverage when they need it most."
Leger Marketing surveyed 1,514 Canadians, 18 years of age or older and that held either home, tenant and/or car insurance.
Findings from the survey include:
• 48% of Canadians would have their car towed following a collision without first confirming that their insurance covers the charges;
• only 18% of Canadians know that their home insurance covers them for accidental damage to someone else's property;
• 35% of young Canadians (ages 18-34) are unsure of what damages are covered by their car insurance; and
• 29% of young Canadians (ages 18-34) don't know if their home or tenant insurance covers loss from fire.
"What is clear from our survey is that Canadians are purchasing home and car insurance without taking the steps to understand what they are getting," said Saskia Matheson, Allstate Canada's spokesperson.
"While we understand insurance policies may not offer the most entertaining read, if people are not fully aware of what their coverage entitles them to or the process to make a claim, then they may not get the full benefits of the coverage when they need it most."
Friday, August 12, 2011
Popular, but untrue urban legends about insurance alive and well: TD Insurance survey
Twenty-nine per cent of Canadians incorrectly believe driving red cars will result in more expensive insurance premiums, while 54% believe two-door cars are more expensive to insure, according to a recent TD Insurance survey.
Part II of the TD Insurance 2011 State of Insurance Report delves into these and other popular myths about insurance products. A more complete summary of the findings can be found at:
http://www.smrmediaroom.ca/TDInsuranceMyths.html
Overall, the online survey of 1,000 people conducted in March 2011 by Environics Research Group found that "when it comes to making significant decisions regarding insurance products and services, 63% of Canadians don't go to an insurance provider, but instead ask their friends, family or colleagues for advice (25%), rely on searching the Internet (33%), or simply go with their gut."
This hearsay approach to insurance knowledge likely plays a part in the spread of misinformation about insurance products and services. The TD Insurance survey identifies a number of these myths and legends.
For example, 48% of the survey respondents believe their auto insurance premiums won't increase if they get into an accident but don't file a claim.
Also, 63% of Canadians wrongly believe they will be reimbursed at today's prices if they file a home insurance claim for stolen or damaged items.
"A standard home policy only covers you for the value of your contents, less depreciation," says Henry Blumenthal, vice president and chief underwriter for TD Insurance.
"For example, if you purchased a television five years ago for $500, you might only get $100 for it if it were destroyed in a fire, even if it costs $600 to replace that same TV today. If you want a higher form of protection, you should choose to add the replacement value option to your contents coverage, which will ensure the contents of your home are insured for the amount it costs to replace them today."
Based on the results of its survey, TD Insurance expressed concern Canadians were putting themselves, their families and assets at risk by making misinformed decisions about their insurance based on hearsay and insurance urban legends.
Part II of the TD Insurance 2011 State of Insurance Report delves into these and other popular myths about insurance products. A more complete summary of the findings can be found at:
http://www.smrmediaroom.ca/TDInsuranceMyths.html
Overall, the online survey of 1,000 people conducted in March 2011 by Environics Research Group found that "when it comes to making significant decisions regarding insurance products and services, 63% of Canadians don't go to an insurance provider, but instead ask their friends, family or colleagues for advice (25%), rely on searching the Internet (33%), or simply go with their gut."
This hearsay approach to insurance knowledge likely plays a part in the spread of misinformation about insurance products and services. The TD Insurance survey identifies a number of these myths and legends.
For example, 48% of the survey respondents believe their auto insurance premiums won't increase if they get into an accident but don't file a claim.
Also, 63% of Canadians wrongly believe they will be reimbursed at today's prices if they file a home insurance claim for stolen or damaged items.
"A standard home policy only covers you for the value of your contents, less depreciation," says Henry Blumenthal, vice president and chief underwriter for TD Insurance.
"For example, if you purchased a television five years ago for $500, you might only get $100 for it if it were destroyed in a fire, even if it costs $600 to replace that same TV today. If you want a higher form of protection, you should choose to add the replacement value option to your contents coverage, which will ensure the contents of your home are insured for the amount it costs to replace them today."
Based on the results of its survey, TD Insurance expressed concern Canadians were putting themselves, their families and assets at risk by making misinformed decisions about their insurance based on hearsay and insurance urban legends.
FSCO charges Ontario Disability Management Inc. with auto insurance fraud
Ontario's auto insurance regulator, the Financial Services Commission of Ontario (FSCO), has charged Ontario Disability Management Inc. and Aksana Miakouchkina (also known as Roxanne Mitch) with knowingly making false or misleading statements to an auto insurer to obtain payment for goods and services provided to an insured.
FSCO also charged Gregori Miakouchkine, the company's director, with authorizing or permitting the company to make false statements and with failing to take reasonable care to prevent the company from doing so.
FSCO announced the charges, which have not been proven, in a post on its Web site. The first appearance for these matters is scheduled for Oct. 13, 2011.
FSCO also charged Gregori Miakouchkine, the company's director, with authorizing or permitting the company to make false statements and with failing to take reasonable care to prevent the company from doing so.
FSCO announced the charges, which have not been proven, in a post on its Web site. The first appearance for these matters is scheduled for Oct. 13, 2011.
Insurers must move quickly to get second opinion when surveillance video contradicts opinion of retained health professional: arbitrator
An Ontario arbitrator has ordered a $6,000 special award against an insurer because the insurer relied too heavily on surveillance video in support of its monthly attendant care payments of more than $2,000, instead of relying on the advice of a health care professional it had retained.
The claimant, named in the arbitration decision as ‘Mr. S.,' was 51 years old when he was knocked down by a car while crossing a busy road in May 2006. An arbitrator at the Financial Services Commission of Ontario (FSCO) found the man had suffered a catastrophic impairment.
The Economical Mutual Insurance Company retained Phillip Wendt, whose September 2009 occupational therapy report recommending $6,682.91 for attendant care. Wendt treated Mr. S. bi-weekly for one half to a full hour per day from November 2009 to July 2010.
Citing Wendt's assessment. Mr. S says he requires 24-hour supervisory care and is therefore entitled to receive the full $6,000 maximum cap for attendant care benefits.
The Economical, however, paid Mr. S. $2,106.76 per month ($2,054.30 short months) from September 2009. (Mr. S. did not claim benefits prior to September 2009.)
The arbitrator found the company relied on video surveillance in determining this payment. The company contends the video shows "Mr. S. can safely and independently walk, transfer from sitting or lying down to upright or standing, be left alone, and handle some of his personal dressing and hygiene."
The Economical retained a second expert in 2008-09 to determine catastrophic impairment, Sherry Taillefer. She issued a report to The Economical in January 2011, in which she stated she thought $1,991.54 would be a more appropriate monthly rate. Her opinion was based on personal visits in 2008 and 2009, and also on what she had seen in the video surveillance.
The arbitrator ruled Mr. S was entitled to receive a monthly attendant care benefit of $2,987.47, an increase of $850 per month from what he had been receiving from the company since 2009.
However, despite the fact that the company had been making payments to Mr. S., the arbitrator nevertheless held that the insurer had unreasonably withheld the difference from the claimant on the basis of its video surveillance. Basically, the arbitrator said the company should have acted more quickly to gather a second opinion in light of the video surveillance.
Until Taillefer's January 2011 report, the sole occupational therapy assessment had been Wendt's 2009 report, the arbitrator noted.
"I am of the view that Economical's failure to abide by [Wendt's]
recommendation or ask for professional review during the 15 months between October 2009 and January 2011 must bear consequence," FSCO arbitrator Fred Sampliner wrote. "Otherwise, insurers could simply ignore or discount their health care professionals' opinions without deterrent."
The claimant, named in the arbitration decision as ‘Mr. S.,' was 51 years old when he was knocked down by a car while crossing a busy road in May 2006. An arbitrator at the Financial Services Commission of Ontario (FSCO) found the man had suffered a catastrophic impairment.
The Economical Mutual Insurance Company retained Phillip Wendt, whose September 2009 occupational therapy report recommending $6,682.91 for attendant care. Wendt treated Mr. S. bi-weekly for one half to a full hour per day from November 2009 to July 2010.
Citing Wendt's assessment. Mr. S says he requires 24-hour supervisory care and is therefore entitled to receive the full $6,000 maximum cap for attendant care benefits.
The Economical, however, paid Mr. S. $2,106.76 per month ($2,054.30 short months) from September 2009. (Mr. S. did not claim benefits prior to September 2009.)
The arbitrator found the company relied on video surveillance in determining this payment. The company contends the video shows "Mr. S. can safely and independently walk, transfer from sitting or lying down to upright or standing, be left alone, and handle some of his personal dressing and hygiene."
The Economical retained a second expert in 2008-09 to determine catastrophic impairment, Sherry Taillefer. She issued a report to The Economical in January 2011, in which she stated she thought $1,991.54 would be a more appropriate monthly rate. Her opinion was based on personal visits in 2008 and 2009, and also on what she had seen in the video surveillance.
The arbitrator ruled Mr. S was entitled to receive a monthly attendant care benefit of $2,987.47, an increase of $850 per month from what he had been receiving from the company since 2009.
However, despite the fact that the company had been making payments to Mr. S., the arbitrator nevertheless held that the insurer had unreasonably withheld the difference from the claimant on the basis of its video surveillance. Basically, the arbitrator said the company should have acted more quickly to gather a second opinion in light of the video surveillance.
Until Taillefer's January 2011 report, the sole occupational therapy assessment had been Wendt's 2009 report, the arbitrator noted.
"I am of the view that Economical's failure to abide by [Wendt's]
recommendation or ask for professional review during the 15 months between October 2009 and January 2011 must bear consequence," FSCO arbitrator Fred Sampliner wrote. "Otherwise, insurers could simply ignore or discount their health care professionals' opinions without deterrent."
Friday, July 22, 2011
Canadian commercial lines likely to see flat pricing in 2011 Q3: Marsh
Overall Canadian market conditions remain favourable across most commercial lines through the end of the 2011 Q2, but signs of a firming market are beginning to appear in segments of the marketplace, according to Marsh.
In its Canadian Insurance Market Midyear Update, Marsh examined data from transactions brokered by Marsh through early July 2011.
The report's findings suggest the majority of commercial property, casualty, and financial and professional insurance buyers are not experiencing significant rate increases.
Property insurance rates are increasing in individual sectors such as energy and mining, and 2011 catastrophe losses could further affect rates for some buyers.
In the mining sector, specifically Canadian companies with operations outside of Canada, Marsh anticipates overall rate increases of between 5% and 10% in the second half of 2011, with a potential increase of as much as 20% for insureds with catastrophe exposures and poor loss records.
In the first half of 2011, most upstream energy exploration and production property risks were subject to rate increases of between 5% and 10%. But control-of-well general liability rates remain fairly flat.
Underwriters are also starting to look more closely at contingent business interruption and contingent exposures following the Alberta wildfires. They are requiring more information from insureds before offering such coverage, the report says.
On the other hand, in financial and professional lines, including directors and officers liability, insurers are offering broader coverage options as they seek to expand their market share.
"It is too early to tell if the second half of the year will bring any overall increases to commercial insurance rates in Canada," said Alan Garner, president and CEO of Marsh Canada Limited.
"Marsh expects that pure Canadian commercial accounts will see rates remain flat well into the third quarter of 2011, and possibly beyond."
In its Canadian Insurance Market Midyear Update, Marsh examined data from transactions brokered by Marsh through early July 2011.
The report's findings suggest the majority of commercial property, casualty, and financial and professional insurance buyers are not experiencing significant rate increases.
Property insurance rates are increasing in individual sectors such as energy and mining, and 2011 catastrophe losses could further affect rates for some buyers.
In the mining sector, specifically Canadian companies with operations outside of Canada, Marsh anticipates overall rate increases of between 5% and 10% in the second half of 2011, with a potential increase of as much as 20% for insureds with catastrophe exposures and poor loss records.
In the first half of 2011, most upstream energy exploration and production property risks were subject to rate increases of between 5% and 10%. But control-of-well general liability rates remain fairly flat.
Underwriters are also starting to look more closely at contingent business interruption and contingent exposures following the Alberta wildfires. They are requiring more information from insureds before offering such coverage, the report says.
On the other hand, in financial and professional lines, including directors and officers liability, insurers are offering broader coverage options as they seek to expand their market share.
"It is too early to tell if the second half of the year will bring any overall increases to commercial insurance rates in Canada," said Alan Garner, president and CEO of Marsh Canada Limited.
"Marsh expects that pure Canadian commercial accounts will see rates remain flat well into the third quarter of 2011, and possibly beyond."
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