The Insurance Bureau of Canada (IBC) has released a statement welcoming Newfoundland and Labrador’s provincial government’s decision to remove 5% of the retail sales tax paid on auto insurance premiums over the next four years.
In the statement, IBC Atlantic manager of government relations Tom O’Handley said that the decision is “a significant step in the right direction” to stabilize the province’s market.
“Auto premiums in Newfoundland and Labrador are already the highest in the Atlantic region. This change will make auto insurance more affordable for consumers and that is a very positive move,” O’Handley remarked.
“We need to fix the current system. It now costs this province’s drivers more in premiums than their counterparts pay elsewhere in Atlantic Canada,” O’Handley added. “In fact, on average, premiums are 40% higher here. Drivers in this province are unhappy with their high premiums, their limited choice and the increasing presence of uninsured drivers on the road.”
The bureau also said that it is in support of the NL government’s upcoming auto insurance review, which could lead to more auto insurance industry reforms. IBC is hoping that through the review, the government considers how to appeal to more insurers to compete in the local marketplace, offering more choices to drivers in the region.