NL collisions dropped last year - but auto insurance prices expected to remain unchanged

NL collisions dropped last year - but auto insurance prices expected to remain unchanged | Insurance Business

NL collisions dropped last year - but auto insurance prices expected to remain unchanged

New statistics produced by the Royal Newfoundland Constabulary (RNC) in Newfoundland and Labrador revealed that automobile collisions in the province dropped last year – but industry experts warn that it might not be enough to lead to lower insurance rates for drivers in the area.

RNC reported that there were 1,330 collisions in 2020 that resulted in property damage – a 40% year-over-year decrease from 2019’s 2,259.

According to insurance comparison website HelloSafe.ca, rates increased in Atlantic Canada last year despite the drop in collisions. However, the website also found that the rate of increase was notably lower than in the pre-pandemic period, and that insurers had provided premium relief to consumers during the same time.

HelloSafe.ca noted that in the first quarter of 2020, auto insurance price quotes in Atlantic Canada increased by 13%, then by 11.5% in Q2 2020, 8% in Q3 2020, and 2.6% in Q4 2020.

Despite lower rate increases than before the pandemic, the fact remains that Atlantic Canada has yet to see a decrease in auto insurance rates in the wake of the COVID-19 crisis.

“It’s not a good trend,” HelloSafe spokesperson Alex Desoutter told CBC News.

“Many drivers couldn’t use their cars during the pandemic, and we should expect a general decrease in prices.”

Desoutter surmised that if the trend continues, 2021 could eventually see a decrease in prices for drivers in Newfoundland and all across Canada.

However, the Insurance Bureau of Canada (IBC) believes something is keeping insurance costs up despite the drop in actual collision events.

According to Amanda Dean, IBC Atlantic vice president, a clearer picture of auto insurance claims trends for 2020 will not be available until the General Insurance Statistical Agency (GISA) releases its per-province statistical breakdown, which comes out sometime in June. She explained that data from the GISA is used by insurers to prepare for their rate applications.

Dean also told CBC News that while it appears that collisions in Newfoundland and Labrador have decreased, the severity of claims in many cases increased.

“Some individuals were taking the opportunity of vacant roads to drive at excessive speeds, so it stands to reason the severity, the cost of claims would increase because you increase speed and you increase the impact,” Dean said.