NDP Leader Andrea Horwath is driving a hard bargain, but it could pay off for motorists in the form of a 15 per cent auto insurance rate cut — and for the Liberals by averting a June election.

Finance Minister Charles Sousa is granting Horwath’s cornerstone condition for supporting the minority Liberals by promising the reduction in Thursday’s budget.

“This will be legislated. Reducing auto insurance claim costs is part of the government’s plan to lower premiums for Ontario drivers,” Sousa said Tuesday at a Canadian Tire repair garage on Lake Shore Blvd. E.

“We will crack down on fraud, make roads safer and ensure people enjoy good benefits, security and proper care,” he said, adding insurers would be required to offer lower premiums to drivers with good safety records or those who equip their cars with snow tires in winter.

Since February, Horwath has been calling for a 15 per cent cut, which would save the average driver around $225 a year.

Because Progressive Conservative Leader Tim Hudak and his caucus have vowed to vote against the spending plan, the Liberals have been forced to find a way to appease the New Democrats or face defeat in the legislature.

Cutting car insurance costs is the highest profile of Horwath’s seven budget demands, all of which Sousa plans to address in some form or another on Thursday.

These include Horwath’s calls for additional funding to improve home-care services as well as to help young people find jobs.

But the NDP leader wasn’t ready to say Tuesday whether the Liberals have gone far enough to merit her backing.

“We are still interested in getting results from that budget. We’re going to take our time. We’re not going to have knee-jerk reactions,” Horwath told reporters.

“We’re going to pay attention to what Ontarians are saying and thinking about the budget and about the context here at Queen’s Park,” she said, referring to the “serious” scandal over cancelled power plants that will cost taxpayers at least $585 million.

“We’ll make our decision with that input in mind.”

As disclosed Tuesday by the Star’s Martin Regg Cohn, the Liberal plan for lower premiums will come in part from a mandated reduction in profits for insurance companies.

The legislation would “instruct” the Financial Services Commission of Ontario, which regulates the industry, to aim for a 15 per cent reduction by following government “guidelines.”

Sousa hopes that this NDP target can be met by cracking down on fraud as well as lowering profit margins for the companies that have benefitted from previous Liberal changes capping payouts for some kinds of injuries.

While Ralph Palumbo, vice-president of the Insurance Bureau of Canada, welcomed the Liberals’ plan to combat fraud, he emphasized, “We’re looking forward to seeing what the details are from the budget.”

“In this political climate with the minority government it’s not the easiest way to make public policy. It’s messy. We understand why the government feels the need to do this, but sometimes . . . you get unintended consequences of policy under these circumstances,” Palumbo said.

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“Let’s be careful that it’s done in a responsible way,” he said, warning “cutting rates without first reforming the system, will threaten the ability of insurers to protect Ontario’s drivers.”

With files from Rob Ferguson

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