Unnecessary regulations on Canadian Commercial Insurance companies: Soaring commercial auto insurance rates killing small businesses – October 13, 2020,
Whenever politicians are trying to get votes, they’ll usually write regulatory laws based on the advice of some lobbyist group. Now, during the normal times, nobody pays attention to these horribly written laws that usually benefit the larger companies, but during the bad times, which usually involve people contacting the insurance company in record numbers for claims, the now much smaller market of insurance companies in unison raise their rates and this is always the problem with Big government.
The government deems it wise to view the world from a labor unions perspective, the labour union motto is basically if a business can’t pay their minimum wage, then that business doesn’t deserve to be in business. So what the government often does is it repels companies would it doesn’t deem fit and fewer commercial insurance options equate to higher prices.
In a nutshell that’s what’s happening in the story, I point to below, with only a handful of commercial insurance companies available and with COVID-19, the commercial auto insurance companies don’t even have to pretend to care. Now, part of the reason the world has a fractional reserve model has to do with events like this. Keynesian economics, never anticipated that the government would regulate the private sector out of existence.
It’s not even to say Canada is under a gold standard, we’re on a fiat standard and the economic situation is so deflationary that financial sectors in Canada are pricing in the risk. Now if there were more options available to consumers, one insurance companies loss would be another gain, however, the barrier to entry to become a commercial auto insurance company in Ontario is so ridiculous that a lot of companies simply who’d otherwise do business in Ontario pass on us.
Ontarians voted for Liberals over and over and over again and even when a Conservative is in power, the Conservative politician dare not engage in austerity and this is how nationalization or some sort of special tax rates or tax exceptions happen for the business that are here.
One size fits all commercial insurance exists primarily because of the regulatory environment in Ontario. Now, I’ve been saying it for years now, expect the Canadian dollar to be debased, unfortunately for Canada, namely Ontario and Quebec the Canadian dollar has been rising as of late, and the debasement of the currency is not the same as the Bank of Canada artificially lowering the Canadian dollar to benefit eastern Canada.
Debasement means in deflationary economy prices can’t go any lower, because the cost of paying the government isn’t deflating with the private sector economy. Now, in a deflationary economic environment insurance companies are usually getting a lot of claims, because when people have fewer dollars people get desperate, also in a debasement scenario the prices for everything start rising and the government can’t implement price controls.
Soaring commercial auto insurance rates combined with a carbon tax is a recipe for disaster!
interesting times ahead!