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Letter: N.L. drivers deserve better insurance rates

["<br />Royal Newfoundland Constabulary officers Sgt. Jim Smith, left, and Const. Stephanie Carter, right, converse with one another at the scene of Sunday's serious single motor vehicle accident on the Outer Ring Road which occurred just before 11:30 a.m. The lone occupant of the vehicle – a male driver – lost control of his car and went over an embankment landing in a dense area of trees, as seen in the background. Police had the eastbound lane from the Manuel's Overpass Bridge to Donovan's Industrial Park closed to vehicle and pedestrian traffic while they conducted their investigation and removed the vehicle from the wooded area. At far left is RNC forensics identification section officer Const. Pat Hickey, photographing the accident scene as part of the investigation. The skid marks are where the vehicle operator lost control of his car and went off the road."]
Police officers confer at the site of an accident on the Outer Ring Road in St. John’s.

 

Let’s talk about auto insurance. My company insures approximately one out of every four cars in Newfoundland. I think that Newfoundlanders simply pay too much for auto insurance for what they get in return.

That’s why we welcome the government of Newfoundland and Labrador’s review of the auto insurance system. It’s time. You deserve better.

Most Newfoundland drivers never, or rarely, make a claim, but are paying for skyrocketing lawsuit-fuelled claims costs. Meanwhile, you’re also getting stuck with the bill for those who are illegally driving without any insurance.

Insurance claims costs in Newfoundland are rising faster than anywhere else in Canada. Newfoundland insurance claims are also higher and there are more insurance claims in total — including more lawyers involved — than anywhere else in Atlantic Canada.

That means that if you are a good driver, you are getting stuck with higher premiums: $1,102 in Newfoundland compared with an average of $780 in the other Atlantic provinces.

Most Newfoundland drivers never, or rarely, make a claim, but are paying for skyrocketing lawsuit-fuelled claims costs. Meanwhile, you’re also getting stuck with the bill for those who are illegally driving without any insurance.

Add in the fact that there seems to be a high number of uninsured drivers in Newfoundland, and you, as an honest driver, are paying even more money for their accidents while they break the law.

Your auto insurance premiums have jumped 22.4 per cent between 2008 and 2016. During that same time, the cost of auto insurance in other Atlantic provinces increased by less than 11 per cent.

Meanwhile, the average amount paid per vehicle for insurance claims in Newfoundland skyrocketed by 67 per cent in that same eight-year period.

We need to get the costs you pay under control.

It’s a simple formula.

The Newfoundland government regulates the premium rates we charge and the auto insurance products we sell.

So, when claims costs go up, the cost of your insurance premiums goes up. When personal injury lawyers take more payments out of the system, your premiums go up. When there is more insurance fraud, your premiums go up. When drivers don’t pay for insurance but cause accidents that lead to claims, your premiums go up.

Aviva currently pays out more to settle claims in Newfoundland than we collect in premium dollars, which is unsustainable. The reason I mention this is to point out that there are problems with the system. This isn’t working for you and it’s not working for us either.

We can do better for you. We really should do better for you.

Newfoundland and Labrador is the only province in Canada where auto insurance rules and regulations haven’t been updated since 2003.

We hope that as a result of the insurance review underway, Newfoundland’s government will introduce reforms that bring down the cost of claims and reduce the number of uninsured drivers.

Together we can do better for Newfoundland drivers.

 

Gordon Murray

Vice-president, broker distribution, Atlantic

Aviva Canada Inc.

 

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