New Brunswick's auto insurance rates could see double-digit increases next year

New Brunswick's auto insurance rates could see double-digit increases next year | Insurance Business

New Brunswick

New Brunswick could be in for an unpleasant surprise next year, as auto insurance rates in the province are expected to see double-digit increases next year – as much as 50% in some cases.

Insurers are saying the increases are a response to a sudden surge in auto accident claims in the province. Records state that auto accident claims expenses in NB among private passenger cars in 2018 hit $380.2 million – a $147.3 million increase over the span of six years.

Sonnet – the insurance brand owned by Economical Insurance which serves just over 3,000 NB drivers – has filed a request for a whopping average rate hike of 50.3% in 2020 for both new and existing customers. It is the single largest increase applied for by any insurance company in the province over the last three years.

In contrast, Economical Insurance (which covers almost 55,000 NB drivers) has applied for a comparatively modest 11.9% increase for next year.

"Our proposed rates are calculated based on industry realities, and are a move to get to a more cost-appropriate position for both Economical and Sonnet, which have historically been underpriced in New Brunswick," Economical Insurance executive vice-president Paul MacDonald told CBC News.

Another insurer, Unifund Assurance (which covers more than 24,000 NB drivers), has filed for a 24.5% average increase with the New Brunswick Insurance Board. Once approved, the rate change will take effect later this fall. The company’s average auto rate increase for next year may be just 24.5%, but 7,000 of its customers are facing much higher rates between 30% and 35%, CBC News noted.

Wawanesa has filed for an 8.6% average increase in rates for NB drivers, but roughly 4,000 of its policyholders will see increases of up to 25% instead.

An insurance advocate has called for insurers to at least clarify why certain customers are being charged more next year.

"Some companies should be more transparent and if they're charging me 35% more with my premium they should send me a letter — not only my bill — but say 'Hey Miss, [here's why],'" explained Michele Pelletier, the province’s consumer advocate for insurance.