IBC auto insurance campaign used old data to argue against NL’s auto insurance system

Published: March 18, 2019

Updated: April 1, 2019

Author: Luke Jones

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Data used by Canada’s private insurance industry representative to critique the Newfoundland and Labrador (NL) auto insurance system is outdated, according to a new investigation.

The Insurance Bureau of Canada (IBC) has often targeted the current auto insurance model for setting rates too high. To reduce costs, the bureau has called for increased claims costs measures.

One suggestion offered by the Insurance Bureau of Canada (IBC) is for Newfoundland and Labrador to replace its current $2,500 deductible. The industry representative says the deductible should be replaced with a $5,000 compensation cap on minor injuries. IBC has previously said such a cap has worked in other provinces and help to keep premiums under control.

In its latest call for change, the IBC said motorists in NL are paying much more for auto insurance than other provinces. An ad campaign has been running TV spots in the province and urging customers to visit the website “betterautoinsurance.ca” to compare rates with the rest of Canada.

While the site lets users compare rates between NL and other provinces, an investigation by CBC News suggests the information on the website is misleading.

Specifically, the website miscalculates the average auto insurance premiums in other countries. For example, the average rate in New Brunswick (NB) is pegged at $789, 29% less than the average in NL. Under those terms, the IBC’s calls for reform are well founded.

However, the data for New Brunswick’s average premium is from 2016. Since then, the province has seen widespread rate increases from insurance companies. Yes, premiums in NB are still more affordable than NL, but not at the wide margin the site suggests.

Speaking about the data, IBC Atlantic vice-president Amanda Dean told CBC News that the bureau knows the data is old.

“We’ve been using the newer [2017] numbers in some of our communications pieces in the Newfoundland market. Clearly we need to go back and update the numbers on that site,” she said.