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How minor collisions are having major impacts in NL

The auto insurance system is under review in Newfoundland and Labrador. Sharing your story can help make a difference. Contributed by Insurance Bureau of Canada
The auto insurance system is under review in Newfoundland and Labrador. Sharing your story can help make a difference. -Contributed by Insurance Bureau of Canada

Minor car accidents are one of life’s little annoyances. Many of us have, or will have at some point in our lives, a minor collision. From a fender-bender in bumper-to-bumper traffic or a windswept door in the grocery store parking lot, thank goodness for car insurance. But, only if you can afford it.

Little collisions; big bucks

The frequency of auto insurance claims is higher in Newfoundland and Labrador than any other Atlantic province. However, the growing number of claims is only part of a bigger picture —payouts on claims are also much higher in this province.

Contributed by the Insurance Bureau of Canada with data from General Insurance Statistical Agency

In the late 1990s and early 2000s, the cost of auto insurance claims in Atlantic Canada was increasing faster than inflation, causing premiums to rise. In 2003 and 2004, to help lower premiums, the Maritime governments introduced a cap on pain and suffering awards for people having minor injuries, such as sprains and strains — NL opted for a $2,500 deductible on these awards instead. Since then, the cost of bodily injury claims in NL has continued to grow.

What does this mean?

NL residents make more claims, which cost more to settle, than those in other Atlantic provinces. That makes the system more expensive for everyone. Accidents happen, but they shouldn’t break the bank.

Insurance at a premium

Newfoundlanders and Labradorians also pay some of the highest insurance premiums in the country. In fact, drivers in this province pay on average 40 per cent more than those in the rest of Atlantic Canada. Unfortunately, this has become unaffordable for many motorists and has led to increasingly more uninsured drivers on our roads, further fueling an unsustainable auto insurance system.

Too many of us can’t afford auto insurance, but none of us can afford to drive without it.

Contributed by the Insurance Bureau of Canada with data from General Insurance Statistical Agency

Solutions are needed

Changes must be made so we have a sustainable auto insurance system that works for everyone. 

This province needs an auto insurance product that helps injured people get better quicker and puts cost controls in place for everyone who pays for an auto insurance policy. We need:

  • An auto insurance system that provides, quick, medically sound rehabilitative care
  • More choices when it comes to where you can buy auto insurance

What is a cap on court awards for minor injuries?

In the Maritime provinces, minor injuries have detailed definitions, but are largely those injuries that will resolve completely in days, weeks or months. The cap applies only to that portion of the court award that deals with non-pecuniary awards — that is, the amount to compensate for pain and suffering caused by the injury. Lost wages and healthcare treatment bills are all recoverable.

A review is underway

For the first time in 14 years, Newfoundland and Labrador is reviewing our auto insurance system. The Public Utilities Board has been requested by the Government of Newfoundland and Labrador to review and report on a number of issues, including the reasons behind increasing claim costs and options to reduce these costs.

Your voice can make a difference

It’s time to make the auto insurance industry work better for everyone. Learn more and share your story with the Public Utilities Board today. Visit betterautoinsurance.ca for details.

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