The Insurance Bureau of Canada (IBC) has once again weighed in on the state of Newfoundland and Labrador’s auto insurance system, providing possible solutions to address the province’s rising insurance costs.
The Board of Commissioners of Public Utilities (PUB) is resuming its hearings this week to review the issues surrounding NL’s auto insurance – particularly the reasons why claims costs in the area are rising, and what can be done to reduce costs.
Coinciding with the hearings, IBC Atlantic vice-president Amanda Dean sent Members of the House of Assembly (MHAs) a letter outlining the issue and presenting recommended steps toward a possible solution.
“Auto insurance claims are too high relative to the premiums that are taken in. Once insurers pay provincial and municipal taxes; broker fees or agent salaries; building costs; and other operational fees, auto insurance is a losing proposition,” Dean said in her letter.
Dean made a number of recommendations that would help relieve the pressure on both insurers and drivers:
During a previous PUB hearing, Dean responded to accusations that insurers have profited while NL drivers continued to pay for mounting insurance costs.
“Let me address the elephant in the room – that’s the falsehood circulating around the province that over the past few years insurance companies have posted hundreds of millions of dollars in profits,” Dean said in a previous statement. “Insurers are not making money on auto insurance in Newfoundland and Labrador. They are losing money [because costs are escalating].”
