| Mike's Comments |
May 26, 2010The HST - good news and not so good news... First the good news: Insurance will NOT be subject to HST. The taxation of insurance will remain the same for us Ontarians, NO TAX ON CAR INSURANCE, and 8% tax on 'property/casualty' policies (think home and business insurance) and some recreational vehicles. There is already premium tax built into your premiums, and the Insurance Industry already carries a fairly high tax burden, so thankfully, there won't be even more added with this change. The bad news? Insurance companies will be faced with higher claims costs as HST will have to be factored into settlements and adjusting expenses. Since we have yet to find the money tree, this will mean some effect on premiums at an already difficult time for the business (many companies turned in a poor financial performance for 2009 due to high claims costs) and for consumers (the recession has been a challenge for everyone). Many of our companies have already factored this into their pricing but there may be further increases as a result. Consumers will see some relief in the first year in the form of 'rebate' cheques from the Province which should help a bit, but in the end, it's one of life's few certainties.... Michael Stuart, BBA, FCIP, CRM, CAIB Grant, Jones & Stuart Insurance Brokers Phone: 905-470-2732 ext 225 Toll Free: 1-800-445-2270 Fax: 905-470-2762 |