Government orders insurance review
The provincial government launched a major review of automobile insurance rates in the province to figure out why Newfoundlanders and Labradorians are forced to pay more than drivers in the rest of Atlantic Canada.
Municipal Affairs Minister Eddie Joyce and Service NL parliamentary secretary Bernard Davis announced last Tuesday the government is asking the Public Utilities Board to study insurance, and come up with recommendations for how to reduce insurance costs, with the aim of enacting legislation in the fall of 2018.
Drivers here pay on average about $1,100 for their insurance, compared to less than $800 on average in the rest of Atlantic Canada.
“Reforming auto insurance in this province is a key part of our campaign platform — a promise we made to the people of Newfoundland and Labrador,” Joyce said.
“We just know that they’re up, and the public wants some answers to bring the rates down.”
The plan is for the PUB to conduct a two-phase approach, first doing a detailed review of closed insurance claims in the province to figure out why costs for the companies are higher than other provinces.
Separately, the PUB has been directed to do a review of taxi insurance claims, because rates for cab drivers are a special concern.
In the second phase of the review, the PUB will review the different insurance plans offered and do a jurisdictional scan across Canada to figure out if anything can be changed to reduce costs.
When it comes to taxis, specifically, Doug Mccarthy said the news is very welcome. Mccarthy is the spokesman for the Taxi Owner Alliance of N.L. and he said they’ve been dealing with major insurance hikes in recent years.
“We are looking at rates right now that are driving us out of business faster than we can pick up customers,” Mccarthy said.
“We are to the point now that if something drastic doesn’t happen, by 2018 there will be no taxis in Newfoundland and Labrador.”
Jason Sharpe, president elect of the Insurance Brokers’ Association of N.L. was also optimistic that good things would come out of the PUB review, especially the study of past insurance claims.
“I mean, I think the closed claim study in the first step in that matter — to find out what exactly is wrong with the insurance rates in Newfoundland,” Sharpe said.
“I don’t think they’re, you know, gouging people in Newfoundland at all. I just think the product itself needs to be reviewed, and hopefully we can get to the bottom of it.”
New Democrat MHA Lorraine Michael said she expects her party will present at the PUB, advocating for a public automobile insurance system, instead of a corporate model.
“We always said that it would be a good way to go, because we know in the provinces where they have it, it’s there for the benefit of the people,” Michael said. “It’s not there to make money for the company; it’s there for the benefit of the consumer.”
This graph, provided to media by the provincial government, shows N.L. car insurance rates are higher than other Atlantic provinces in recent years. The government is ordering the Public Utilities Board to do a review to try to bring costs down.
The provincial government has ordered a review into automobile rates in NL.