By: Luke Jones, Published on April 6, 2018 04:59 PM, Last Update on April 30, 2018 02:03 PM
The New Brunswick consumer advocate for insurance has warned auto insurance premiums in the province are out of hand, up 10 per cent, increases which are described as unfair. Michèle Pelletier says it looks like rate increases will result in the highest rise in premiums seen in New Brunswick for 10 years.
"When you're a consumer and you're paying roughly $800, and all of a sudden you have a $100 increase, that's a lot of money for consumers to absorb at one time," Pelletier said Friday.
The province has enjoyed a stable auto insurance climate for several years, with increases sticking around three per cent. Pelletier says companies have kept premiums stable because they did not want to face the New Brunswick Insurance Board, which greenlights higher rate changes in the province.
"If companies are asking for less than three per cent, they don't have to appear in front of the New Brunswick Insurance [Board]," she said. "They've been filing for less than three per cent in order to avoid that."
Companies are now pursuing higher rates, even if that means going before the board. Insurers say they are forced into increasing premiums because of a $7,500 cap placed on minor injury claims in 2013, the previous cap had been set at $2,500.
"The companies are saying now, 'We're starting to see more claims of the injured, they're costing more money because of them.
What's just and reasonable for the company is not necessarily what's just and reasonable for the consumer.
Now cars, they're more sophisticated with all the electronics, it costs more money to repair cars. That would be another factor.
"They're saying, 'We're losing money and we want to charge more to the consumers.'"