Intact CEO says no-fault auto insurance is not “a panacea”
Published: December 4, 2019
CATEGORY: Car Insurance
No-fault insurance is being discussed as a potential solution for some of the problems facing auto insurance in British Columbia and for auto liability. However, the CEO of Canada’s largest insurer says while no-fault auto insurance can help the industry, it is not the definitive answer.
“I think that the no-fault product for both car repairs and bodily injury can be a very effective product, provided that it is not overly rich, so as to invite third parties to take advantage of the richness of the product,” said Charles Brindamour, CEO of Intact Financial Corp., during a recent conference call.
During the call, a securities analyst referenced the potential for no-fault coverage to come to British Columbia. Such a move would prevent plaintiffs in the province from suing after an auto collision.
“I don’t think no-fault is a panacea to automobile insurance issues,” Brindamour said when asked about no-fault in B.C. “It’s a calibrated one to get the job done. But far more important, in my view, is choice and private competition.”
B.C. Attorney General David Eby has said the province is not seeking to switch to complete no-fault, but many believe it is possible as Eby attempts to bring the Insurance Corporation of British Columbia (ICBC) out of financial trouble.
Under a no-fault system, the ICBC would have total control of claims, including determining how much a claimant should receive and the cost of medical services. Such a system would potentially save the company money.
Over the last two years, the ICBC has lost over $2 billion, leading to many calling for B.C. to adopt private insurance competition for basic auto insurance.
A no-fault system would remove the trial process. Lawyers with the Trial Lawyers Association of British Columbia says such a system would be harmful to motorists. They argue no-fault insurance would mean British Columbians can no longer sue for damage.
“The last thing we should be doing is taking away people’s rights,” Trial Lawyers Association of BC president Ron Nairne said in a statement, CBC News reported.