Taxi insurance in Newfoundland and Labrador is escalating, but is the blame at the foot of cab drivers? 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.”
The report does not detail how the delayed loss reports are causing claims costs to increase. However, the paper suggests "Prompt notice permits prompt investigation and early recognition of liability which provides opportunities to resolve the claim sooner and may result in a lesser overall payout.”
The taxi review is part of a wider auto insurance review currently in profess in Newfoundland and Labrador. 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.
The taxi review called for an “audit of taxi closed claims to determine the causes of poor claims experience, including details regarding the underlying causes of loss and high claim costs incurred, and provide any recommendations to reduce claim costs and reduce rates.”
The number of drivers on each policy was a problem when it came to assessing loss damage.
“Despite the fact that often numerous drivers were listed, sometimes up to 11 on one vehicle, there were still many drivers involved in accidents that were not listed on the policy,” the report notes. “No premium was being collected for the unlisted drivers.”