The province’s automobile insurance review is attracting a number of submissions on how the system may be improved to bring down rates and provide more stability in the industry.
One of the latest to state their case is Intact Financial Corp., which operates in Newfoundland and Labrador through three brands: Anthony Insurance, Intact Insurance, and Macdonald Chisholm Trask Insurance.
Intact has released an eight-point plan it says will make the industry stronger and place it on more stable grounds for both ratepayers and insurance companies.
The plan includes suggestions of a minor-injury cap — to include sprains, strains and whiplash injuries. The cap would not include injuries that result in serious impairment.
There is also a recommendation to make accident benefits mandatory, and implement pre-approved, evidence-based treatment protocols.
Natalie Higgins, the head of Intact for Atlantic Canada, said implementing a cap of $5,000 in Newfoundland and Labrador would help contain costs.
“One of the challenges is that we see delays in claims coming forward up to two years at times, before we have a chance to treat an individual for their injuries,” Higgins said. “So we want to see those types of things improve.
“There is a misconception around how a minor-injury cap actually works. All it covers is pain and suffering damages. Things like rehabilitation benefits, loss of income, wage replacement … all of that is outside of the cap. You do not lose your right to sue if we have a cap. Last year, (the Insurance Bureau of Canada) conducted an omnibus survey, and in that survey it became very apparent that it was important to people in Newfoundland and Labrador that they retain the right to sue. And with the implementation of a minor-injury cap, that does not change.”
Earlier this month, the provincial government launched its public consultation process aimed to complement the industry review currently underway by the Public Utilities Board (PUB).
Last July, the government provided the terms of reference to the PUB to conduct public consultations, as well as two independent closed claims studies — one on rising automobile insurance claims costs, and a second specifically focused on claims related to taxi operators.
Insurance rates have steadily increased over the 12 years since the last review of the province’s insurance industry. People in Newfoundland and Labrador pay between 30 and 40 per cent more for their automobile insurance than people in other Atlantic provinces.
In the House of Assembly Wednesday, Service NL Minister Sherry Gambin-Walsh said government consultations will explore issues outside the scope of the PUB’s mandate, such as the rate setting process.
“There are also opportunities for the public to share their ideas about measures to improve highway safety and accident prevention in the province,” Gambin-Walsh said. “The goal of the review is to identify opportunities to lower rates that will benefit consumers and help bring stability to the industry. Feedback will help inform potential future changes to the Automobile Insurance Act and the Insurance Companies Act in fall 2018.”
A group of personal injury law firms in the province is running a campaign called “Insult to injury,” aiming to protect traffic accident victims. The campaign includes a petition. The group states that implementing a cap on what accident victims can receive for pain and suffering is taking away the victims’ rights to fair compensation while increasing profits for national and multinational insurance corporations.
Valerie Hynes, a partner in the law firm Roebothan McKay Marshall, told The Telegram recently there are many factors to take into account that are driving up insurance premiums. She said that while total premiums charged for auto insurance have increased over time, the portion of the premiums charged for third-party liability — the part that relates to injury claim payments — has remained relatively flat for the last decade. If injuries were causing the overall increase in premiums, she said, the third-party liability portion would be the part going up.
Hynes said she deals daily with innocent victims of automobile accidents caused by distracted or impaired drivers. She says they include people of all ages who can no longer do things like housework, sporting activity or their jobs because of life-altering pain.
She said imposing a cap is not a solution, and a cap would mean the insurance industry — not the courts — will decide what the pain and suffering is for a victim.
“You don’t get in an accident and automatically get compensation,” Hynes said. “You get in an accident and everybody is upset and emotional, and if there is a significant injury you are taken to the emergency right away. You can also suffer injuries after the adrenaline drains from your body and you calm down and realize, ‘I can’t move my arm.’ There’s different degrees of injuries and in order to make a claim for damages you have to prove your injury, and you have to prove that with objective evidence, and that includes medical reports from your doctor, X-rays, assessment reports from the ER, physiotherapy testing, etc., and all of that is documented.
“(As a lawyer) I have to collect that evidence, submit it, and that evidence may reveal a minor injury, a significant injury or a catastrophic injury. And I am challenged on every single file by a highly educated and well-trained adjuster who is critical of the evidence I submit. There are so many checks and balances, and people are held to a high standard.
“So the solution (of implementing a cap) is unconscionable. To say that innocent people who didn’t do anything wrong, who’ve been injured in an accident, should pay for the fact that somebody else hurt them by taking away their right to compensation … is unconscionable.”
The provincial government’s survey is available on the main page of Service NL’s website or can be completed online at EngageNL.ca. Consultations will continue until May 31.