Taxi drivers protest auto insurance limitations in Newfoundland and Labrador
Published: March 20, 2019
Updated: April 1, 2019
Author: Luke Jones
CATEGORY: Car Insurance
Taxi drivers are protesting high auto insurance premiums in Newfoundland and Labrador just as the House of Assembly met to discuss the insurance system in the province.
Outside the Confederation Building, cabbies gathered under a banner saying rising insurance costs in the province. NL completed an auto insurance review last year amid rising premiums and taxi drivers want to see more competition introduced by the government.
While normal motorists in the province can buy insurance from private companies, taxi drivers must purchase their coverage through the Facility Association. Critics say this is limiting drivers and raising costs because the FA is considered the “insurer of last resort”.
During the Assembly discussion, Service NL Minister Sherry Gambin-Walsh said NL’s auto insurance system has been under pressure for two decades. As part of the review, the Public Utilities Board (PUB) highlighted a situation where private insurance companies are not making profit due to claims costs.
The Insurance Bureau of Canada (IBC) has warned some insurance companies may eventually choose to leave the NL market if there is profitability. PUB says premiums have tripled since 2012 and the Facility Association has requested rate increases every year.
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.
While drivers seem to be paying too much for auto insurance, the Insurance Bureau of Canada (IBC) has consistently offered a conundrum situation in NL. Drivers are paying too much, but insurance companies are not making money due to rising claims and repair costs. So much so, many insurance providers may even leave the market if reforms are not favourable.