By: Luke Jones, Published on September 11, 2018 09:28 AM, Last Update on September 11, 2018 06:30 AM
90% of motorists in Newfoundland and Labrador (NL) welcome the ongoing review into the province’s auto insurance system. The widespread support for the review was a highlight of an Insurance Bureau of Canada (IBC) survey published this week.
In an effort to gauge customer feelings on the auto insurance market in NL, the IBC surveyed 400 residents. Titled the “2018 NL Public Opinion Study,” the survey showed a high-level of frustration amongst drivers in the province. Customers say the chief reason for supporting the review is the current cost of car insurance in Newfoundland and Labrador.
The IBC has previously offered recommendations for solving issues with auto insurance in NL:
“Implement a minor injury damages cap: A cap amount of $5,000 with annual inflation adjustments, along with a definition of minor injury that reflects the prevailing medical literature. These are injuries that resolve within days, weeks, or months. Additionally, the amount of the cap is over and above lost wages and medical bills. Features of this recommendation have already been implemented elsewhere in Canada;
Enhance accident benefits: To bring NL in line with neighbouring provinces, we suggest making accident benefits mandatory, and increasing the benefit amounts to match the neighbouring Atlantic Provinces. We are also suggesting to establish pre-approved evidence-based treatment protocols for minor injuries which would see people begin treatment quickly
Make it easier to repair and replace damaged vehicles: a direct compensation property damage (DCPD) model would mean that regardless of who is at fault, the customer's insurer would repair their vehicle in a collision. However, for rating purposes, fault would still be assigned to the at-fault party; and
Change the rate regulation process so that it is quicker and less costly: This too will work toward making the product more affordable to offer for Newfoundland and Labrador drivers. In spite of the best efforts of those who regulate, the current system is incredibly costly. This translates into price shock for consumers and deters new entrants.”
While most drivers in NL welcome the review, the majority did not know an auto insurance reform process was underway. Indeed, only 48% were aware a review was happening and only supported when the IBC informed them a review was underway.
67% say they support IBC’s recommendation to create a minor injury cap in Newfoundland and Labrador. However, many drivers do not think private insurers are under pressure. 85% say they think the industry is operating at a profit, but the IBC has warned private providers may leave the NL market if changes are not made.