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:
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.
Guthrie Insurance commentary: Based on the surprisingly low rate of consumers opting for increased benefits, it suggests that not enough people appreciate the importance of these benefits. A plan of proper insurance is intended to save money over the long term. If the typical $100 or so for increasing disability or medical benefits is too expensive, imagine how expensive an under-insured loss will be which can easily exceed hundreds of thousands of dollars!
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