Minor injury caps are one option to bring down insurance costs for taxi drivers in the province, but personal injury lawyers insist they’re not the way to go.
The first two reports as part of the overall review were released by the Board of Commissioners of Public Utilities (PUB) on Tuesday, outlining taxi insurance claims across the province.
One report, filed by Toronto-based Cameron and Associates, found that the biggest impact on increasing costs for taxi claims had to do with how the companies reported incidents. Many incidents since 2010 were late being reported, or not reported at all. Increased investigation led to increased costs to insurance companies.
Some taxi drivers involved in incidents were not listed on the insurance for the cars, which meant no premium being collected by unlisted drivers. The lack of listing caused increased costs to the insurance company, which in turn raised costs to those insured.
The report says in addition to what taxi companies need to change, insurance companies need to radically change the insurance offered to taxi drivers. The report recommends increased deductibles, caps on minor injury claims and a framework for treatment of minor injuries.
In 2016, insurance companies took in $2.5 million over 158 claims. Those claims cost the insurance companies $4.3 million in payouts through third-party liability insurance. The average cost per claim to companies was $27,731.
A minor injury cap would see a limit, but on small injury claims. Currently, there’s no such limit in this province. In Ontario, there’s a $3,500 cap on how much can be claimed for minor injuries.
Imposing minor injury caps on all drivers in the province, one of the options being explored in the auto insurance review, would decrease the average payment per insurance claim.
Another part of the issue is that taxi drivers are only allowed to be insured through Facility Association, a company of last resort for high-risk drivers, according to Steve Marshall, partner with Roebothan McKay Marshall.
Marshall says instead of putting minor injury caps in place, taxi drivers need to be given more choices in insurance, to bring down expenses.
“Taxi drivers ought to be allowed to apply and get commercial coverage (from other companies). Don’t make them go to Facility, because the good drivers are getting lumped in with the bad,” said Marshall.
“Bad taxi drivers should go to Facility. There’s an incentive then for that bad driver to become a good driver and get out of Facility. By making the taxi insurance profitable by capping all the damage they cause, then you’re punishing 500,000 people for 400 taxi drivers.”
But Consumer Advocate Dennis Browne urges patience when it comes to the auto insurance review being conducted by the PUB.
“These are early days, early stages. These reports have not been tested. They’re like any expert reports in a court of law. The report itself doesn’t stand on its own merits,” said Browne.
“It has to be tested, subject to examination, and cross-examination. Until we get all the reports, we’re in a preliminary stage.”
The findings of nine reports ordered for the auto insurance review are expected to be completed by June. Hearings at the PUB are expected to start in late May.