Insurance companies collect premiums

Insurance companies collect premiums from consumers and use these funds to pay for claims. Money to pay for large legal settlements comes directly from these funds, or in other words, directly from the pockets of each and every policyholder. If claims costs increase, insurers adjust premiums to keep pace.

Until limits were put in place recently, pain and suffering awards for minor injuries, such as sore necks or backs, exceeded $20,000 in many tort-based provinces। This may have benefited a few claimants, but it cost the majority of policyholders in the form of higher premiums.

There is no evidence that no-fault insurance is more costly to consumers; there is no conclusive proof that insurance rates are less expensive in a tort-based system. Insurance premiums are a reflection of a number of different factors, including driver’s experience, driving record, and geographic location, to name a few. Insurance companies use these factors and deductible levels selection to determine the appropriate premium for the coverage. Comparisons of premiums in tort and no-fault systems across different provinces and cities in Canada are often misleading because they don’t take into account factors such as where a driver lives, levels of coverage, driving experience and driving record. In Canada, Quebec, Saskatchewan and Manitoba have the “purest” no-fault auto insurance systems। Quebec’s no-fault system was introduced in 1978, with Manitoba following in 1994 and Saskatchewan in 1995. (In 2003, Saskatchewan introduced an option for persons in the province to recover as though within a tort system. A very small number have requested that option.) In 1990, Ontario introduced a no-fault insurance system that is a “hybrid” system that blends no-fault insurance with the legal right to sue in certain circumstances. All of these provinces have retained strong, no-fault characteristics in their insurance systems.

The business of car insurance is actually highly regulated by provincial governments, who set the minimum coverage levels। Governments also keep tabs on how much insurance companies charge for their products. Insurance companies can change neither the basic coverage nor premiums without government approval.

It may be true that you do not pose a danger to other drivers when you don't wear a seatbelt, but you do pose a serious hazard to yourself. If you are in a collision and you are not wearing a seatbelt, you are much more likely to be injured. For example, think of the difference between the whiplash injuries you may experience if you are wearing a seatbelt during a collision and the more serious injuries you might sustain if you are not wearing a seatbelt and get thrown out of a flipped car or go through the windshield.

When you are injured in a car crash, it is your insurance company that pays your medical expenses. The cost of the rehabilitative care for a whiplash-type injury is lower than the cost of treatment for injuries sustained as a result of getting thrown out of a car during a collision. Therefore, if you do not wear a seatbelt you are a greater risk to your insurance company because you are more likely to submit high-cost claims. This is why insurance premiums may increase when you are convicted of driving without a seatbelt. As far as your insurer is concerned, driving without a seatbelt does make you a more dangerous driver।