By: Luke Jones, Published on March 29, 2018 10:04 AM, Last Update on March 29, 2018 07:05 AM
The Insurance Bureau of Canada (IBC) this week released a statement to praise the measures made by Newfoundland and Labrador to address auto insurance premiums. The province announced its plans to remove 5% of retail sales tax paid on auto insurance premiums. Reductions will happen over the next four years.
In a statement, IBC Atlantic manager of government relations Tom O’Handley said the bureau welcomes the decision and called it a step in the right direction.
“Auto premiums in Newfoundland and Labrador are already the highest in the Atlantic region. This change will make auto insurance more affordable for consumers and that is a very positive move,” O’Handley remarked.
“We need to fix the current system. It now costs this province’s drivers more in premiums than their counterparts pay elsewhere in Atlantic Canada,” O’Handley added. “In fact, on average, premiums are 40% higher here. Drivers in this province are unhappy with their high premiums, their limited choice and the increasing presence of uninsured drivers on the road.”
The decision is part of a wider review being carried out in Newfoundland and Labrador to assess the auto insurance market in the province. Consumers in the province are paying excessive auto premiums, the highest in Atlantic Canada, and the government commissioned a review to find out why. The ultimate goal is to create legislation to reduce premium rates.
This week officials announced issues with taxi drivers reporting losses as a contributor to increasing premiums. The Province's Public Utilities Board suggests drivers are not reporting losses quickly enough (sometimes not at all) and as a result claims costs are increasing. Insurers are then passing the cost onto the drivers.
The assessment was made following a review into taxi claims. "The factor identified by Cameron as having the biggest impact on loss experience was the manner in which taxi companies reported claims,” says a the report, which was issued to the PUB by Cameron & Associates. “There were many incidents of late reporting and, in fact, often no reporting by the taxi companies. This led to investigation issues due to delay.”