Troy Lifford defends auto insurance rates for N.B. drivers
Provincial government satisfied with 3rd lowest rates, despite report that N.B. drivers pay too much
The Alward government is dismissing claims New Brunswick drivers pay too much for auto insurance – despite a report from its own expert that says they do.
In a report for the Attorney General's office, the Toronto firm of Oliver Wyman states insurers will collect an extra $70.8 million in premiums from New Brunswick drivers this year.
"New Brunswick ranks the third lowest in insurance rates across the country," said Lifford on CBC's Political Panel. "When we look across Canada we're in the bottom three.
"We have a competitive market here," said Lifford. "We are the third lowest rates in the country. The system is working."
Over the past five years, automobile insurance premiums in New Brunswick have averaged 43 per cent lower per vehicle than in Ontario. That's a reflection of New Brunswick drivers having significantly fewer accidents than the national average, driving cheaper cars, experiencing less theft, and collecting less money in claims due to a payment limit on minor injuries. At the same time, the level of claims in New Brunswick has been 56 per cent lower than in Ontario.
Paula Elliot of Oliver Wyman says New Brunswick drivers are significantly overcharged and the low level of claims they generate doesn't justify the premiums they pay.
"In deriving premiums we have the losses, we have the expenses and we have the profit and those three combine to make up what the required premium estimate is," Wyman told the New Brunswick Insurance Board during hearings this week.
The Insurance Board hearings were examining the potential impact on insurers of tripling the minor injury cap to $7,500 and whether that increase should allow companies to increase the premiums they charge.