There has been no cool breeze of price relief on auto insurance at our house.

Ontario announced recently that the average of auto insurance premium rates will decline slightly starting Sept. 1. But that’s for a new slimmed-down policy with reduced accident benefits coverage and a $3,500 cap on treatment of minor injury.

Our auto insurer says it would charge us a whopping $840 extra, making for a 15 per cent increase in our total annual premium, if we wish to maintain (almost) the same injury benefits as we now have.

Many other drivers — particularly in the congested Greater Toronto Area — should also be prepared to pay more, even for less coverage. There may have been premium increase since their last renewal, or an increase approved earlier that will come into effect shortly after Sept. 1.

Insurers, brokers and government officials are hoping Ontario’s latest efforts to control the spiralling cost of injury claims will result in smaller future premium increases. It’s just too early to be sure.

“It is expected that the reforms will moderate the growth of claims costs and as a result premiums are expected to be lower than would have been without reforms,” says the Financial Services Commission of Ontario.

Premium rates are already about 44 per cent higher on average than in the summer of 2007. Yet industry analyst Joel Baker of MSA Research Inc. says insurers paid out about $1.42 for the assessment and treatment of injuries for every dollar of accident benefits premium collected in Ontario during the first quarter of 2010.

After Sept. 1, the new standard auto policy in Ontario will pay up to $50,000 for treatment for noncatastrophic injuries, as in some other provinces. You will have to pay extra for the former $100,000 limit, or for the optional $1.1 million limit.

We have two cars in Toronto and a son blamed for an accident two years ago. So our premiums are already high. To continue having $1.1 million of medical, rehabilitation and attendant care coverage, we will pay $360 a year instead of $84. A $600 weekly income replacement benefit for our son would cost $396 instead of $84, $250 weekly caregiver, housekeeping and home maintenance benefit would cost $240.

George Cooke, president of The Dominion of Canada General Insurance Co., says these prices for optional additions were calculated as a percentage of the basic accident benefit costs. So Toronto residents will pay a higher dollar amount than most drivers in the province, where injury costs are lower.

He holds out the possibility of an adjustment in rates if new legislated controls on the cost assessment and treatment costs are effective.

Bryan Yetman, an insurance broker in Whitby and president Insurance Brokers Association of Canada, says “no two companies are alike” in how they are setting prices for buying extra coverage. Some are charging a percentage of the cost of basic benefits, and others a flat dollar amount.

Major insurers Aviva Canada Inc., Economical Mutual Insurance Co., and Co-operators General Insurance Co. say they are charging a percentage amount. But the percentages vary: Economical will charge 10 per cent for $100,000 of medical coverage, Co-operators 7.8 per cent, although that may vary.

“There is no one magic number,” says Randy Carroll, chief operating officer of the brokers’ association. “It is a shopper’s market to be sure.”

Several other factors could affect what you will pay at your next renewal, for the basic coverage and the optional top-up coverage.

• Percentage increases varied widely in the past couple of years, and those companies that took modest increases earlier my need to adjust rates in the near future.

• Some companies have prior approval to raise rates after Sept. 1. TD General Insurance Co., which raised rates on renewals 10 per cent last September, and again in February, is to raise rates 27 per cent Sept. 10.

“We think reform will help in the long run,” says Henry Blumenthal, chief underwriter for TD, which also owns other insurers. “We required significant rate increase in some cases, because the losses were just tremendous. We aren’t even breaking even in the Ontario.”

• Ontario passed, with the encouragement of brokers, a change in regulation that make the use of credit scores and other personal information to set rates or screen auto insurance customers an Unfair or Deceptive Practice.

This could help reduce rates for some, while increasing rates for those who benefited from discrimination.

• More uninsured drivers could be pushed off the road or into buying coverage after Nov. 1, when a new vehicle registration offices will have electronic access to information on insurance coverage.

• Intact Insurance Co. has received approval for a more precise method of rating policyholders and risk of an accident by year of birth, instead of broad age bands, gender at specific ages, distance driven to work down to a single kilometre, and the months since a person’s last accident instead of years.

Baron Insurance Services Inc., an actuarial consulting firm, is offering to provide other insurers with less historical data on accident frequency something similar.

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So, comparing the cost of insurance among various companies could become more important.

Meanwhile, drivers who receive policy renewal notices should speak with their agents and brokers about the levels of accident benefit coverage that will suit their needs.

James Daw, CFP, appears Tuesday, Thursday and Saturday. He can be reached at 416-869-4817 or at jdaw@thestar.ca