Copy of the email that I sent to Minister Horwath:
Dear Minister Horwath,
My name is Andrew J, and I am an Urban Planner. I have been following the political situation in Ontario very closely, and I was intrigued by your suggestion of lowering auto insurance premiums. Premiums in Ontario are certainly too high, and something needs to be done about it.
Your suggestion of a mandatory 15% reduction in premiums certainly has a lot of merit. However I believe that I have an alternative suggestion, one which would accomplish the same goal you’re trying to achieve, and more.
What I propose to you is creating a ‘Public Option’ for auto insurance, similar to what Barack Obama proposed with US healthcare. It would be a government-run insurance corporation that would offer an alternative choice within the auto insurance market.
The insurance company, for simplicity’s sake call it the Ontario Auto Insurance Corporation (OAIC), would have insurance rates set at 15% below current market rates, the same percentage reduction which you have proposed. However, rather than legislating a mandatory reduction to all insurance rates, let the free market work. I would suggest that by introducing a lower cost alternative into the marketplace, that other insurance companies would lower their rates as a result, especially if it meant they were losing customers to OAIC.
The second part of the proposal, which I personally think is the biggest benefit, is the question of what to do with OAIC profits. I would suggest that the profits (of which there most certainly will be a fair amount) be invested back into the Province’s transportation and transit infrastructure. This could potentially be a piece of the Revenue Tool puzzle that Metrolinx is currently holding roundtable discussions about.
Imagine offering up a solution for Ontarians that would see them paying lower rates than they are now, with some of that money going back into the infrastructure they depend on, instead of going into padding the bottom line of an insurance company. In my view, that’s a win-win.
This proposal also offers up a Revenue Tool that isn’t about asking people to pay more. As a Planner with a keen interest in Transit Planning, I certainly understand the funding challenges facing the Province today. I understand the need for additional revenue to fund transit expansion, and I support efforts to generate it. However, a lot of average citizens don’t fully understand the need, and see any new revenue tools as a ‘cash grab’.
Proposing something like OAIC, with the profits going into road and transit infrastructure, I think can remove some of the stigma surrounding Revenue Tools, because it demonstrates ‘outside the box’ thinking that doesn’t simply involve asking people to pay more. It makes more efficient use of money that people are already paying, and would continue to pay regardless.
I would strongly suggest that you or a member of your team examine the potential of this proposal in greater detail, to see if it truly is feasible. If you have any questions about my proposal, I would be more than happy to answer them. I thank you for taking the time to read this letter, and I look forward to hearing from you.
Regards,