Automobile Insurance Premiums, Highest in Canada

BY My Cowichan Valley Now

The first Duncan-Cowichan Chamber of Commerce luncheon of 2019 provided a bleak look into the future of auto insurance premiums in our province.

The Vice President of the Insurance Bureau of Canada’s Pacific Division, Aaron Sutherland made a presentation to those in attendance and highlighted that because ICBC has a monopoly, drivers aren’t going to get any breaks on their premiums any time soon.

“Government is bringing in many important solutions, things like a minor injury cap, things that are going to start driving down the cost curve at ICBC, but unfortunately for drivers,  it isn’t going to do anything for their pocketbook,” said Sutherland. “The price they (drivers) are paying is expected to keep going up, we’ve seen this again with the latest ICBC rate increase. It’s clear today, we need to start looking outside of ICBC for these solutions.”

We live in the most expensive province in the country with regard to auto insurance premiums and those costs are going to keep trending in the wrong direction.

Sutherland said creating a competitive marketplace is key to eventually start seeing some savings.

“We need to look at best practices from across the country and across North America. One of those best practices is that perhaps we need to start looking outside of ICBC for solutions, bringing a competitive marketplace to BC, giving drivers the choice they deserve and the opportunity to shop around for their insurance.”

ICBC doesn’t share data with other insurance companies in what Sutherland calls ‘a data-driven industry.’

The challenge is to create a competitive market, so ICBC has to share its data.

 

‘You killed the car’: Families complain of dead vehicles, thousands in repairs after station sold bad gas

Fuelling up left a woman stranded with her child and a man stuck holding an $18K bill

Rachel Ward · CBC News

Loraine Bon and her husband thought they were helping their son when they fuelled up the old truck he takes camping.

Instead, the gas they pumped in Bearspaw, northwest of Calgary, put an end to the 4Runner. The fuel was contaminated, and the truck hasn’t started since.

Now six months later, Bon hasn’t got the Centex Bearspaw gas station to pay for the repairs, roughly $3,000 worth.

The gas station’s insurance is disputing whether the Centex is at fault for the soiled fuel, which damaged dozens of Alberta vehicles.

“We don’t care who’s at fault. You’re at fault,” Bon said of Centex. “You sold us the gas. You killed the car.”

Whose fault is it?

The insurance companies for the gas station, the tank installer and the tank manufacturer are arguing over who caused saline to leak into the station’s fuel.

An investigation after the incident showed the inner lining of the fuel tank split, allowing the saline barrier to leach into the fuel — something the company told customers about in a letter last summer.

That saline solution caused vehicles to seize up, some almost immediately. Some had mechanical issues. Others had to have their entire engine rebuilt, like James Niblock of Cochrane, Alta., who got a bill for an $18,000 repair.

Niblock was one of the first customers that morning in July, as he headed into Calgary early with his toddler. He suspects he got a higher concentration of the saline solution than others who gassed up later in the day.

Out of pocket

Niblock’s insurance covered the large bill, but he’s still owed for other expenses — the tow truck, car rental and insurance deductible — which total roughly $1,000. He doubts he’ll see that money again.

“So between the three of them at the moment, they haven’t figured out who is liable,” Niblock said. “While this kind of drags on and no one’s really communicating with us, obviously a lot of people have got either unusable engines or have basically had to pay out of their own pocket for repairs.”

He found out this week that his van needs more work, but from what he’s heard, his case sounds like a good one.

Niblock provided an email to CBC News from the independent adjuster handling the files for Federated Insurance, which insures Centex Petroleum. In it, the adjuster said the insurer was “not issuing any payment” until fault was determined.

“We will let you know when that occurs,” the adjuster said in a Dec. 5 email.

After the leak, Centex closed down and called the tank manufacturer, ZCL Composites, to investigate. The manufacturer repaired the split seam in the fibreglass tank and certified the tank as ready to receive fuel. The gas station reopened and sent a letter to drivers.

“Centex has assured all customers that were affected by this event that we will reimburse them for their costs,” said the letter from managing partner Shafiq Bhura, which Niblock gave to CBC.

Reimbursed ‘almost everyone’

In a brief phone conversation with CBC, Bhura said the insurance company had asked him not to comment “for legal reasons.”

“We’ve reimbursed almost everyone, and those that were complicated or were not straightforward, our insurance company is looking after them,” he said. “So we haven’t had anyone come directly to us with anything unclaimed for the past at least a month.”

He said he understood Centex Petroleum’s insurance company, Federated Insurance, was trying to get everything paid out. Bhura declined to comment further.

Requests for comment to Federated Insurance and ZCL Composites went unanswered. A lawyer handling the file for the insurance firm said he did not have permission to talk. The adjuster declined to comment.

Drivers are asking Centex Petroleum for an easier route to get compensation to replace or repair vehicles damaged by contaminated fuel. (Grant Hindsley/Associated Press)

All of this has been stressful for Jamie Lowe, who has two kids. Shortly after she fuelled up at Centex Bearspaw, her 2015 Dodge Ram broke down late at night while she had her five-year-old in the back seat.

“It was a pretty terrible situation. There was no apology, no accountability. They said that you need to talk to our insurance adjuster,” Lowe said.

Her vehicle was fixed and Centex paid for the repairs.

Seeking apology, easier compensation route

Lately, Lowe’s vehicle has started randomly shaking and rumbling. She said she’s worried the cost for further repairs will be delayed until the at-fault party is determined.

“Well, that could take years, and so many people were out thousands of dollars, which really isn’t affordable. To me, they didn’t go about it the right way,” she said. “I’ll never fill up at a Centex gas station again because of how the situation was handled.”

Trial lawyers say ICBC treating those injured in crashes unfairly due to settlement changes

By  | Global News

ICBC has recently changed the way it handles injury settlements and B.C. trial lawyers are worried it will hurt victims and increase costs for rate payers.

According to the B.C. Trial Lawyers, the public insurer has started revoking previous settlement offers in the last week and is now considering payments based on new criteria.

Lawyers have been told ICBC is now going to judge settlements based on a “meat chart,” with no discretion for the adjuster.

“They will apply one, two or three criteria and put a case in a certain level,” B.C. Trial Lawyers president Ron Nairne said.

“And now ICBC is coming in at this late stage and changing the rules of the game. People will say if the rules are not fair, they are going to have to proceed to trial.”

ICBC says the changes are necessary because of the quickly escalating costs of injury claims and the associated legal expenses. The public insurer says the rising costs of claims is by far the single biggest pressure on ICBC’s finances, having gone up by 43 per cent in just five years, with a projected total of $3.67 billion in 2018.

“In particular, these costs are being driven by litigated injury claims,” ICBC spokesperson Adam Grossman said. “Since March 2017, the dollar value of settlements demanded by plaintiff lawyers for litigated files has increased by 30 per cent, while the average cost of closed litigated injury claims has risen by 20 per cent from $101,920 in 2017 to $121,826 in our current fiscal year.”

“We have constantly been looking for ways to address rising injury claims costs and the pressure they put on insurance rates.

“It’s clear we need to continue to find fair and reasonable ways to get the cost of the average injury claim down to more of a historical, inflationary trend, rather than the sharp increases we’ve seen over the past year.”

But lawyers say this last-minute change is not fair and could have a negative impact on clients. In some cases, lawyers say the new settlement offers are much lower than is acceptable. If the client decides to go to trial, it could delay the expected payout.

Trials themselves are also expensive. In most cases, the overall payout is higher in a trial because of the legal fees.

“This is going to have a huge impact on claimants,” Nairne said.

“People come to ICBC expecting to be treated fairly, that they are not going to be getting a windfall, but will be fairly treated.”

ICBC says it has had success closing more injury files and is seeing fewer cases go to trial each year. But one the concerns from the insurer is that it is seeing fewer offers being accepted and settlement costs are being driven even higher.

“We are doing what any responsible insurer would do when claims costs skyrocket beyond historical trend lines,” Grossman said.

“Our only other option is to increase our insurance rates by levels British Columbians cannot afford, which is not a viable solution.”

The changes are part of an ongoing battle between ICBC and lawyers. The lawyers are concerned that the changes being made at the public insurer are not in the best interest of their clients. The public insurer is concerned that lawyers are increasing their costs, including an increase in commissioning reports, that is adding to the loses at the insurer.

ICBC lost $1.3 billion last year and is forecast to lose more than $800 million this year. The insurer has announced major changes coming on April 1, 2019 that will create a cap of $5,500 on payouts for pain and suffering for minor injuries.

The insurer explains that one of the reasons for the need to change are the mounting legal costs. ICBC says plaintiff disbursement costs have increased by 21 per cent this fiscal year over last. But Nairne is quick to defend the work that he is doing and rejects the suggestion lawyers are artificially inflating what they are looking for in injury settlements.

“The only thing I can do is look at the facts of the case and make a proposal based on those facts,” Nairne said.

“It is all driven on what is fair, based on what the courts have decided previously.”

Auto insurance review long overdue

Toronto Sun

Premier Doug Ford’s government announced last week it’s going to review Ontario’s auto insurance system in order to lower rates for drivers.

A review – the government is seeking public input until Feb. 15 – is certainly needed, since Ontario drivers pay the highest insurance premiums in Canada despite being among the country’s safest drivers.

A 2017 study by insurance expert David Marshall for the previous Liberal government found Ontario drivers pay 55% more than the Canadian average for car insurance.

It found the average insurance premium of $1,458 per vehicle in 2015 was 24% higher than in Alberta, double the rate in Quebec.

Marshall’s review, “Fair Benefits Fairly Delivered: A Review of the Auto Insurance System in Ontario” described the province as having one of Canada’s least effective auto insurance systems.

The previous Liberal government failed to address these issues during its 15 years in power, with former premier Kathleen Wynne famously dismissing her broken 2013 promise to lower premiums by 15% as a “stretch goal.”

Ontario’s auto insurance industry blames fraud for high insurance rates, but that’s only part of the problem.

Marshall found $1.4 billion annually – a third of all insurance premium benefits – goes to duelling lawyers and medical experts in court, instead of to treatment for crash victims.

That’s more than the estimated cost of insurance fraud of $1.3 billion annually.

Because of Ontario’s “no fault” insurance system, accident victims often have to sue their own insurance companies for benefits, even when the other driver is at fault or has no insurance.

Consumer groups like FAIR (Fair Association of Victims for Accident Insurance Reform) say this means accident victims have to hire their own lawyers and medical experts to counter their own insurance companies’ lawyers and medical experts, eating up billions of dollars that should be spent on treating and rehabilitating accident victims.

Auto insurers complain that plaintiffs’ lawyers drive up costs by charging outrageously high contingency fees, which redirect money intended for the treatment of victims into the pockets of their lawyers.

What it all amounts to is a broken auto insurance system that no Ontario government, regardless of political stripe, has ever seriously addressed.

Typically, what they’ve done is to allow insurance companies to reduce the standardized benefit packages they offer to their customers, meaning while people can pay less for a standard policy, it’s because that policy contains fewer benefits.

The Progressive Conservatives who, when they were in opposition, accused the Liberals of failing to fix the insurance system, now say that in government they want to lower insurance rates for drivers and increase competition in the insurance industry.

Let’s hope so, because the current system is unfair to both drivers, who are paying the highest insurance premiums in the country despite being among Canada’s safest drivers, and crash victims, who are not getting the treatment they need and deserve.

President & CEO of Aviva Canada, comments on the Ontario auto insurance consultation

the Ontario Government announced a public consultation on the auto insurance system, a positive step towards meaningful product reforms.

Aviva is committed to working with the government to create a more modern regulatory framework, which we have long championed on behalf of consumers. The single most important change we can make to benefit drivers in 2019 is regulatory reform that allows consumers more choice about the product they buy and more options to help them save money on premiums.

Consumers deserve to have more choice, innovative products, in a system that is free from fraud and abuse. Ultimately, we aim to reward good drivers with the right coverage and the best service at a fair price.”

About Aviva Canada

Aviva Canada is one of the leading property and casualty insurance groups in the country, providing home, automobile, leisure/lifestyle and business insurance to 2.8 million customers. A subsidiary of UK-based Aviva plc, Aviva Canada has more than 4,000 employees focused on creating a bright and sustainable future for their customers and communities.

Aviva Canada invests in positive change through the Aviva Community FundCanada’s longest running online community funding competition, which has awarded $9.5 million to over 400 charities and community groups nationwide since its inception in 2009. Aviva Canada was the first insurer to become a national corporate partner of the Canadian Red Cross’ Ready When the Time Comes program, to be there for Canadians when disaster strikes. In 2016, it received The Burns & Wilcox Award for Philanthropy & Community Service. At Aviva Canada, protecting the people and things you love, supporting the causes you care about most and strengthening your local community is just good thinking.

For more information, visit Aviva Canada’s Corporate Responsibility page, or blogTwitterFacebook and LinkedIn pages.

SOURCE Aviva Canada Inc.

www.avivacanada.com

Ontario launches auto insurance system review and public consultation

By Shawn Jeffords

THE CANADIAN PRESS

TORONTO _ The Ontario government has launched a review of the province’s auto insurance system, saying it hopes to lower rates for drivers who pay some of the most expensive premiums in the country.

The analysis announced Wednesday will examine practices in other jurisdictions to find ways to make improvements and introduce more competition. The Progressive Conservative government also said it will be consulting with drivers, insurance companies and other stakeholders until Feb. 15.

“This (issue) has always been controversial,” said Finance Minister Vic Fedeli.  “It was left unattended by the Liberals for 15 years and we’re going to take some real action on it.”

A report commissioned by the previous Liberal government found in 2016 that Ontario had the most expensive auto insurance premiums in Canada despite also having one of the lowest levels of accidents and fatalities.

Since that report was written, British Columbia moved into the lead with the highest rates according to the Insurance Bureau of Canada, with Ontario now the second-most expensive province.

Fedeli said the government will create a regulatory framework that allows for modernization in the auto insurance sector. That will include measures such as changing regulations to permit more electronic communication between companies and their customers and allowing companies to issue electronic proof-of-insurance slips.

“By cutting this red tape and modernizing it we know that that will help us reduce costs,” he said.

Fedeli would not say when the Tory plan to change the system will be presented or if the government will commit to a specific rate cut target.

The Liberals had promised an average decrease of 15 per cent in insurance rates by August of 2015 and when that self-imposed deadline passed, then-premier Kathleen Wynne admitted it had been what she called a “stretch goal.”

NDP legislator Gurratan Singh accused the Tory government of stalling by holding consultations instead of taking action to lower rates.

“Doug Ford is preparing to consult his insider friends in the insurance companies, so they can keep making record profits on the backs of Ontario families,” he said in a statement.

Peter Karageorgos, director of consumer and industry relations for the Insurance Bureau of Canada, said the industry needs help from the government to address a range of issues that lead to increased costs for consumers.

“We can’t just focus on a short-term tweak, repair or alteration, it’s got to be a complete overhaul,” he said.

Karageorgos said regulatory changes, addressing fraud in the system, and tackling auto-repair and health-care costs, are all issues that must be addressed.

“Insurance is no different than any other business,” he said.  “The costs are what drives the price of the product. If we can look at reducing the costs consumers will see better prices.”

Karageorgos said many previous governments have promised change in the sector but most end up making short-term fixes that don’t last.

“We’ve had a lot of tinkering with auto insurance,” he said.  “We haven’t really had a government that’s said, ‘okay, let’s take off the band-aid and fix the root cause of the problem.”’

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