New Brunswick auto insurers seek largest rate hikes in 16 years
Steep auto insurance rate hikes could return to the province, but it's too late to become an election issue
A group of New Brunswick's largest automobile insurance companies is applying for the steepest rate hikes in 16 years.
But bigger bills won't be hitting drivers until weeks after New Brunswick's provincial election at the end of the month — making the topic unlikely to rile up voters like it has in previous campaigns.
"Increases will be significant," said Michele Pelletier, New Brunswick's consumer advocate for insurance.
"They say, 'OK, we're having some really big losses,' that's what they're telling us and they're asking for bigger increases."
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Rising auto accident claims in New Brunswick, in part caused by more generous government rules around what accident victims can claim compensation for, has turned the province from what used to be the most profitable jurisdiction in Canada for auto insurance companies — into one of their most troublesome financial sinkholes.
According to Canada's General Insurance Statistical Agency [GISA], auto accidents in New Brunswick generated $376.9 million in claims in 2017. That's a $144 million — 62 per cent — more than five years earlier with no increase in premiums to pay for it.
GISA numbers show between 2012 and 2017 the average premium paid by drivers in New Brunswick actually fell 53 cents to $803.15 per vehicle.
Pushing drivers to pay more
Pelletier said it was only a matter of time before companies started pushing for drivers to pay more.
"None of us want to have higher premiums. I'm the first one to say I'm paying enough," said Pelletier.
"But there were signs, we could see signs."
Next month the board will hold hearings into an application from New Brunswick's largest auto insurance company — Wawanesa — to raise its premiums on more than 85,000 provincial policy holders by an average of 11.7 per cent. This includes increases of 17 per cent of about 30,000 of those drivers.
The company wants approval to begin charging new customers elevated prices on Jan. 1, and then pass the increases onto existing customers throughout next year whenever drivers' current policies come up for renewal.
Pelletier and the province's Office of the Attorney General are both intervening in the Wawanesa hearing on behalf of consumers, but it will be an uphill fight to derail the application.
Low auto insurance rates
New Brunswick has some of Canada's lowest auto insurance rates, 30 per cent less than in Alberta and more than 40 per cent cheaper than in Ontario.
In a hearing into an eight per cent rate hike application by the Dominion of Canada General Insurance Company earlier this summer, Pelletier and the Office of the Attorney General both intervened and then withdrew when it became apparent the increase was justified.
But Wawanesa and Dominion are not alone.
Economical Insurance, which covers more than 44,000 of New Brunswick drivers, has applied for a 14 per cent increase on 38,000 of those customers with lesser increases for the rest.
Allstate, which covers 33,000 New Brunswick drivers, has applied for an average rate increase of 9.9 per cent on its customers for the second year in a row. That includes 15 per cent increases on 5,000 of its policy holders.
Pembridge has also applied for an average 9.9 per cent increase on its 17,000 New Brunswick clients with Aviva asking for 10 per cent increases on roughly 14,000 of its more than 25,000 provincial policies.
The province has not experienced auto insurance increases of that size since 2002 and 2003 when rising accident claims last triggered major premium bumps.
Widespread public anger nearly toppled Bernard Lord's government in the 2003 provincial election.