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Taxis make their stand

Taxi drivers gather outside Confederation Building Thursday to protest the high insurance rates their industry faces.
Taxi drivers gather outside Confederation Building Thursday to protest the high insurance rates their industry faces. - Joe Gibbons

Drivers protest high insurance rates in their industry

Several taxi cabs gathered in front of Confederation Building early Thursday afternoon to protest high insurance rates for their industry.

Some of the drivers went into the public galleries of the House of Assembly as the session began.

Many taxi operators in the province with good driving records believe their industry will die if major changes do not occur to stem rising insurance premiums they have been dealt over the past few years.

The Public Utilities Board (PUB), in its recently submitted report to the provincial government following its review of automobile insurance in the province, agrees the taxi industry is in crisis.

The PUB acknowledged measures already taken by the industry and government to reduce loss claims, and made suggestions on what other measures the government could pursue.

But the taxi drivers want firm action taken to reduce their rates.

The provincial government issued a release Thursday stating that it is actively seeking solutions to address the decade’s long problem facing the provincial taxi industry regarding insurance costs. That includes meeting with representatives of the taxi industry and implementing measures to help strengthen the industry and enhance the safety of taxis in the province.

The release notes that on July 1, 2018, there were a number of policy amendments that focused on skilled drivers, experience in driving in provincial road conditions, driving history, passenger safety and safer vehicles.

A zero tolerance policy for drugs or drugs and alcohol when operating a taxi came into effect on Dec. 18, 2018.

The PUB recognized in its report, however, that it is unlikely those actions will result in immediate measurable reductions in the taxis loss costs and premiums.

"In the circumstances, it may be advisable to bring together representatives from the taxi and insurance industries, as well as the various levels of government, to build on the work that has already been done and to identify additional measures that can be implemented in the near term to control loss costs and to provide relief to the taxi operators,” the PUB stated.

The report states that Facility Association taxi rate increases experienced in recent years have been the result of the poor taxi claims experience in the province.

"In 2012 the taxi industry reported incurred losses of $6 million which exceeded the earned premiums collected for the period by over $4.2 million, resulting in a loss ratio of 340 per cent," the report notes. "Despite the significant rate increases implemented by Facility Association in the years that followed, the incurred claims costs of the taxi industry continues to be materially higher than the premiums collected."

The report notes that for 2018, the calculated total premium for a taxi with a clean driving record was $7,058 and for a taxi with multiple accidents and convictions it would have been $15,753.

On July 30, 2018 Facility Association filed an application for an additional taxi rate increase of 10.2 per cent, which, if approved, would increase the average premium to approximately $7,965. That application is still before the PUB.

The government’s news release Thursday noted that in Budget 2018, government approved a one-third reduction in the auto insurance tax over four years. This will particularly benefit those paying the highest rates, such as taxi operators.

Government said the PUB’s report demonstrates that the insurance pressures facing the taxi industry have been ongoing for more than 20 years. Facility Association — an unincorporated non-profit organization of all automobile insurers — has filed for rate increases almost yearly since 2012. The total cumulative rate increases over the period 2012 to 2018 for all coverages combined is approximately 244 per cent.

Service NL Minister Sherry Gambin-Walsh has said the goal of the PUB’s review of auto insurance was to help inform the provincial government’s decision making in an effort to stabilize insurance rates and provide the best product possible. Since the report was released in late January, government has met with representatives from the insurance industry, legal community, the taxi industry and, most recently Facility Association, to review the findings.

Changes to legislation will take place within this current sitting of the House of Assembly.

“The current administration is the first to actively seek solutions and address a decade’s long problem facing the provincial taxi industry regarding insurance costs,” Gambin-Walsh said. ‘We acknowledge the pressures facing the industry, and we are currently exploring all options to stabilize rates for the taxi industry and all consumers in our province. As the taxi industry is well aware, I’m always available to meet and try to find viable solutions. Working together, using the information available to us, I believe we can achieve better outcomes for all stakeholders in this matter.”

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