'Heard the concerns': Auto insurance rates to be reviewed by PUB, Service NL
'Claims costs and insurance rates have increased steadily since the last review in 2005'
The Public Utilities Board (PUB) and Service NL will be part of a review of the auto insurance industry in Newfoundland and Labrador, as the provincial government responds to complaints from drivers.
- Insurance hikes driving cabbies out of business, Jiffy driver says
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"There has been a lot of frustration with the escalating costs," Service NL Minister Perry Trimper told CBC Radio's On the Go.
"There's no question, when you start sticking out as much as we are right now in Atlantic Canada — and we're just behind the worst situation in Canada, which is in Ontario — that's something we want to address."
What are the factors that are driving up our rates to the point where it is driving us out of business?- Doug McCarthy, Jiffy Cabs
In a press release Tuesday morning, Trimper said the costs of claims and insurance rates have increased steadily since the previous review in 2005 and that drivers are finding it difficult to cope.
"We have heard the concerns of consumers and stakeholders who are finding it difficult to deal with the rising cost of insurance," Trimper stated in the release.
The PUB review will investigate "costs in the system, the product itself and the rate setting mechanisms" by looking at data from closed insurance claims, according to the release.
Higher claim costs and insurance rates that taxi operators have faced over the past several years will also be examined.
Rates not affordable
Doug McCarthy, a driver with Jiffy Cabs, said the review is overdue.
"Finally we are going to sit down, through public consultations and reviews to determine just what it is that is driving up the insurance for taxis," he said.
"Is it the amount of accidents we are having? Is it the claims pay out? … Is it revolving around personal injury or property damage … What are the factors that are driving up our rates to the point where it is driving us out of business?"
McCarthy said rural Newfoundland will be especially hit if rates continue to increase. With no options for public transportation, people rely on taxis to get to doctor's appointments and the grocery store.
"If it gets to the point where taxi drivers can no longer afford to insure their vehicle, how are these people going to get around? Especially the seniors?" he said.
The PUB will hold public consultations, as will Service NL, with dates and times to be announced later.
A report and recommendations will be submitted to the Newfoundland and Labrador government at the end of the process.
Any changes to the Automobile Insurance Act would be in place by the fall of 2018, according to the government.
Isolating bad drivers
Trimper said the review could result in reduced insurance rates and more accountability. He said the review should isolate drivers who are the source of a lot of claims.
"I don't believe that a normal consumer who's obeying the rules and driving safely should have to pay the same rates as someone who is not," he said.
McCarthy said the review should give government the tools needed to make sure that insurance is affordable for everyone in the province,
"At the end of their consultations and reviews, the government will have at their hands a definite idea of why the insurance rates are where they are," he said.
"If rates keep going the way they are, no one will be able to afford commercial insurance."
With files from On the Go and Nakshi Pandit