Insurance News - Monday, February 29, 2016

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Monday, February 29, 2016:

• Bramalea-Gore-Malton MPP Jagmeet Singh wants industry profits used to drive down auto insurance rates.
• The U.S. National Highway Transportation and Safety Administration told Google that the artificial intelligence system that controls its self-driving car can be considered a driver under federal law.
• Uber has agreed to pay $28.5 million to about 25 million passengers to settle two San Francisco class actions over the way it advertises its services.
• Google is killing off the car-insurance comparison tool that it rolled out last year.
• Uber's popularity is prompting Canadian insurance companies to introduce coverage for drivers carrying paying passengers in their personal vehicles.

Electronic Proof...Still Not in Canada

Three years ago, I wrote an article about the status of electronic insurance cards.  Despite the fact that smartphones, tablets and other technological gadgets are now part of everyday life, providing proof of auto insurance coverage is like a nostalgic trip back to the days of our parents or grandparents.  In Canada,insurance companies and brokerages continue to mail, fax and e-mail copies of the standard pink insurance slips to policyholders upon renewal or policy changes.

Back in 2012, the Property Casualty Insurers Association of America (PCIAA) reported that 11 U.S. states had laws or regulations on the books that allow for electronic insurance cards to be used for both vehicle registration and when being pulled over by the police.  The PCIAA now reports that 43 U.S. states have enacted legislation which permits some form of electronic proof of insurance including electronic delivery and the use of an electronic image as evidence of coverage.  Clearly, electronic insurance cards are well accepted in the U.S.

Why is the U.S. and Canadian experience so different?

For one thing, not all Canadian jurisdictions use the standard 'pink slip.'   The public insurers in British Columbia, Manitoba and Saskatchewan have combined the insurance card with and the provincial motor vehicle registration card.  Quebec is a little different because private insurers sell physical damage coverage and must provide an insurance certificate.  There is no colour requirement and the document can be emailed, although electronic proof of insurance is still not permitted.

In Canada, there has been a perception that electronic delivery of insurance cards or electronic proof of insurance might be more at risk to fraud.  In fact, the paper insurance card is quite susceptible to fraud.  Police officers have no way to validate whether a pink slip provided by a driver is valid and unexpired, and therefore are inclined to just accept it.  

There are also concerns regarding privacy and liability.  When a driver hands over his or her mobile device to a police officer to show proof of insurance, can the officer access other information on the device?  What happens if the police officer drops and damages a mobile device while verifying insurance coverage?  Who Is liable for damages?

The U.S. experiences provide numerous examples of statutory or regulatory approaches to addressing these issues.  In Canada, many legal barriers to e-commerce have been eliminated.  Yet the insurance sector has clung to paper insurance cards. 

In Ontario, there is no legislative requirement that insurance cards be in paper form.   The Compulsory Automobile Insurance Act (sections 3 and 6) requires that a driver must always have an insurance card in their vehicle and must make it available to a police officer for inspection.  It does not stipulate what the card is to look like.  The Ontario Superintendent of Financial Services sets out the content, size and colour of the insurance card through a bulletin.  Consequently, the Superintendent has the authority to approve an electronic insurance card.  No statutory amendment is likely required.

It is inevitable that electronic proof of insurance will come to Canada. The technology exists.  It just seems that no one particularly wants to be the first to make the move.

Insurance News - Friday, February 12, 2016

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Friday, February 12, 2016:

• Trial lawyers and victims group call for inquiry into the use of medical evidence by auto insurers in insurance claims.  Personally, I believe this is symptomatic of a much bigger problem.
• A startup at the Massachusetts Institute of Technology hopes to replace insurance agents with artificial intelligence and make buying auto insurance as easy as texting a photo of your license plate.
• Uber lost its bid to freeze a lawsuit bound for trial over California drivers’ demands to be treated as employees while the company appeals rulings that dramatically increased the stakes in the case.
• A recent Usage-Based Insurance (UBI) study forecasts that 380 million semi, highly or fully autonomous vehicles (AVs) will be on the road by 2030. In the decade preceding 2030, the penetration of active safety and autonomous vehicles will reduce the number of accidents by more than 30%, leading to a significant reduction in insurance premiums.
• Uber is piloting a new way to check the quality of its drivers — by monitoring their driving, speed and distractedness via their smartphones, using the devices’ geolocation information, accelerometers and gyrometers (which reveal whether a person is, for example, moving their phone around while driving) - essentially a telematics application.

Insurance News - Thursday, February 11, 2016

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Thursday, February 11, 2016:

• Developers of driverless cars promise fewer deaths and injuries from car accidents.That could also mean fewer cases for lawyers who handle auto injury litigation, but opinions differ on how much of a threat driverless cars pose to lawyers' livelihoods.
• The guy who solved Uber’s insurance problem has no insurance background.
• Google is disappointed to learn that driverless cars will need a driver in CaliforniaThe state's Department of Motor Vehicles wants someone behind the wheel in case something goes wrong.
• Meanwhile, the National Highway Transportation and Safety Administration told Google that the artificial intelligence system that controls its self-driving car can be considered a driver under federal law.
• Edmonton will become the first Canadian city to allow ride-sharing companies like Uber to legally operate after city council approves a ride-sharing bylaw.

To File or Not to File a Claim?

When should I file a claim and when should I not?  It is a common question we get in our agency and every time it is asks we always say, "it depends on each situation".  Let's first tackle this question with how claims can affect your insurance. 

It varies by insurance company but most companies look at a 6 year window for home insurance claims and a 3 to 5 year window for auto insurance claims.   What this means is that if you file a home claim it can have an affect on your premium for up to 6 years and if you file a claim on your auto insurance it can affect your premium for 3 to 5 years.  If you have more than one claim in this window of time it can really have an impact on your premium and may even cause some insurance companies to look at canceling your coverage.  With this in mind, it is best to consult with your insurance agent to see what prior claims you have on your record before deciding whether or not to file a claim.  If you already have a  claim inside one of those windows of time then it may be worth contemplating whether to file a claim or not.

Let me break for one second to mention that liability claims are a must file.  These would be auto accidents that involve a third party bodily injury or a homeowner claim that involves injury to another person.  These need to be handled by the insurance company and their legal firms.  Also, if you have a large claim such as a totaled vehicle or large size house damage, these too are claims you would want to file without hesitation.  The claims that we are talking about that may or may not be worth filing are things such as backing your car into a light post, backing into an unoccupied car or driving off the road and causing damage to the front bumper when you hit a ditch.  On the homeowner side, it would be small claims such as ice dams that cause a $1000 or $2000 worth of damage or a roof claim that the repair is only a $1000 or so.  These are the types of claims it is worth contemplating prior to filing.  When you factor in deductibles and the affect on your premium for a few years, those smaller claims may be best to pay out of pocket.