Consumer expectations for claims payouts are being met by the industry

The experience of Canadians with Credit Protection Insurance (CPI) on their mortgages and Home Equity Lines of Credit (HELOCs) is very positive, with 87% saying it is a convenient way to protect themselves and/or their families against major financial setbacks arising from death, disability, critical illness, or job loss.

Canadians with CPI coverage also report that they are somewhat or highly satisfied with the purchase experience overall (87%), and are confident in their knowledge about CPI products (90% at time of purchase). In addition, CPI holders say their expectations of the claims process are being met by the industry, with 80% reporting satisfaction with their claims experience (94% for those whose claim was paid).

Those are the key findings of new public opinion research by Pollara Strategic Insights that asked Canadians about their experience with CPI on their mortgage and/or HELOC. This type of insurance, also known as creditor’s insurance, is used to pay off or pay down a mortgage or HELOC, or to make debt payments in the event of covered occurrences such as death, disability, critical illness, or job loss. CPI coverage is typically secured through the financial institution providing the consumer’s mortgage or HELOC financing, and it is provided under a group policy, thereby allowing more Canadians to be insured at economical standard group rates.

According to the research, 83% of Canadians with CPI coverage said it is an effective way to protect themselves and their families from unexpected life occurrences.  Furthermore, 71% said that without CPI, they do not know how they and/or their family would be able to cope, should an unexpected life occurrence negatively impact them financially – for example, not being able to work and earn a regular income. And 70% said CPI is an affordable insurance option.

With respect to the purchase process experienced by CPI holders, 87% said they were satisfied with the overall purchase process; 77% reported satisfaction with the product explanations provided to them; and 74% said they were satisfied with the information provided to them to make an informed purchase decision.

Canadians with CPI coverage also expressed confidence in the CPI claims process, and that their expectations for claims payouts are being met or exceeded. For example, 89% of survivors/next-of-kin who made a CPI life insurance claim reported that it was paid. (The 89% level of CPI life insurance claims payouts reported by the survivors/next-of-kin of CPI insureds in the survey is close to the level found in aggregated self-reported data from CAFII members, which shows that 94% of CPI life insurance claims were paid in the 2018 fiscal year.)

With respect to the factors which Canadians believe are the most important when purchasing Creditor Protection Insurance:

  • 93% said benefits and features of the coverage;
  • 93% said price;
  • 92% said benefit payment amount of coverage;
  • 89% said ease of overall purchase process; and,
  • 88% said being able to speak to someone to answer my questions.

Canadians also said they have a reasonable understanding of CPI coverage terms and limitations, and about the amount of coverage. For example, at the time of signing up for their CPI coverage, 90% of insureds said they understood “very well” or understood somewhat their credit protection insurance terms.

The survey also identified some areas which CAFII members and other providers of CPI coverage on mortgages and HELOCs in Canada can look at to improve the consumer’s experience with this insurance.

For example, 25% of CPI claimants said they had made a complaint about the claims process, with the top two complaints being the following:

  • 35% complained about the length of time it took to process the claim; and,
  • 32% complained about the lack of updates during the process.

However, 85% of claimants who made a complaint said they were satisfied with how their complaint was handled.

Furthermore, some 22% of CPI holder respondents expressed a lack of confidence that a life insurance claim would be paid, without even having made a claim. As this level of confidence is well below the actual claims payout ratio, it is an issue that is concerning to the industry.

“We’re pleased that Canadians feel Credit Protection Insurance is a convenient, effective and affordable type of financial protection for them and their families,” said Keith Martin, Co-Executive Director of the Canadian Association of Financial Institutions in Insurance (CAFII), which commissioned the Pollara research. “However, the survey also shows that there is room for improvement. As an industry, we will continue to look for ways to improve customer satisfaction, and enhance the value to consumers of the Credit Protection Insurance products that our members provide.”

These are the key results from a national online survey of 1,003 adult Canadians who have Credit Protection Insurance on a mortgage and/or home equity line of credit. The survey was conducted from October 3 to 16, 2018.

About CAFII: 
The Canadian Association of Financial Institutions in Insurance is a not-for-profit industry Association dedicated to the development of an open and flexible insurance marketplace. CAFII believes that consumers are best served when they have meaningful choice in the purchase of insurance products and services. CAFII’s members include the insurance arms of Canada’s major financial institutions – BMO Insurance; CIBC Insurance; Desjardins Financial Security; National Bank Insurance; RBC Insurance; ScotiaLife Financial; and TD Insurance – along with major industry players Assurant; Canada Life; Canadian Premier Life Insurance Company; CUMIS Services Incorporated; and Manulife (The Manufacturers Life Insurance Company).

About Pollara Strategic Insights:
Founded in 1980, Pollara Strategic Insights is one of Canada’s premier full-service research firms – a collaborative team of senior research veterans who are passionate about conducting research through hands–on creativity and customized solutions. Taking full advantage of their comprehensive toolbox of industry-leading quantitative and qualitative methodologies and analytical techniques, Pollara provides research-based strategic advice to a wide array of clients across all sectors on a local, national, and global scale.

SOURCE CAFII

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$100,000 Non-Pecuniary Assessment for Central Neuropathic Pain With Poor Prognosis

Reasons for judgment were published today by the BC Supreme Court, Nanaimo Registry, assessing damages for central neuropathic pain caused by a vehicle collision.

In today’s case (Laliberte v. Jarma) the Plaintiff was involved in a 2015 vehicle collision.  She was a passenger in a vehicle driven by the Defendant that lost control “went through a fence and over a bump and landed in a field”.  Liability was admitted.

The collision caused various soft tissue injuries resulting in central neuropathic pain.  The prognosis was for symptoms to continue.  These were largely controlled with medication.  In assessing non-pecuniary damages at $100,000 Madam Justice Russell provided the following reasons:

[28]         The parties agree that the plaintiff suffered soft tissue injuries to her lower back, and was diagnosed with CNP. The parties also agree that the plaintiff’s prognosis for this injury is ongoing chronic pain. The plaintiff continues to suffer symptoms daily, although they are now at a tolerable level when the plaintiff is on medication.

[29]          The plaintiff described her pain at trial as “more of an irritation”. She testified that the medication she takes, Topiramate, reduces her pain by 80-90%. However, if she runs out of Topiramate, her serious symptoms immediately resume and she runs the risk of being bedridden with pain.

[30]         The plaintiff’s position is that she will require medication for her symptoms long term and possibly for the rest of her life, and that she faces the possibility of aggravating her injury by engaging in moderate or heavy physical activities regardless of how effective the medication may be.

[31]         The plaintiff’s evidence was that she had suffered some episodes of depression and anxiety as a teen, and had taken some medication for this but had discontinued use prior to the accident. After the accident, the plaintiff was referred to a counsellor by her family physician but did not attend any such counselling sessions or seek any other help concerning her psychological symptoms.

[32]         The plaintiff had no prior history of low back pain. She described suffering low back pain starting the day after the accident. I note that the plaintiff went into labour three days after the accident. Her mother had to help her into the shower and off the toilet, and she could not climb stairs without significant pain. Prior to the accident, the plaintiff enjoyed longboarding, drawing and art, and played basketball in high school. The plaintiff testified that her level of activity has increased since the date of the accident and she is now at a similar level than she was pre-accident, although she engages at a less intense level…

[48]         The plaintiff’s young age, the potentially lifelong duration of her injury and its impact on her physical ability, the severity of her pain before she went on medication, the emotional suffering caused by her aggravated depression, the impact her pain and depression had on her ability to raise and bond with her newborn son in the crucial months immediately following his birth (as well as the increased pain during the birth itself), and the strain her injuries put on her relationship with her parents, all stand in favour of a higher award.

[49]         I consider the loss of her ability to cradle her baby in her arms and to breastfeed without pain to be serious losses.

[50]         Should she wish to have more children, she faces a difficult choice:  to go off her medication for the duration of the pregnancy and suffer serious pain, or to deny herself the opportunity to bear more children. As a corollary of this issue, she must not allow herself to become pregnant again without carefully considering the consequences.

[51]         On the other hand, the plaintiff’s ongoing injury is not a disabling injury because its effects can be managed through the use of medication, the injury is limited to her lower back, and the injury has not caused a substantially material loss or impairment of her life or lifestyle as compared with her level of activity, recreational pursuits and social inclinations before the accident.

[52]         I also find that her injuries have not necessarily caused any marked impairment of her mental abilities  so long as she is on medication controlling her chronic pain, her academic performance does not stand to be affected. These factors favour a more limited award…

[56]         Having regard to the Stapley factors, and the relevant cases cited by the parties, I award the plaintiff $100,000 in non-pecuniary damages.

bc injury law, Central Neuropathic Pain, CNP, Laliberte v. Jarma, Madam Justice Russell

How changes to EI region boundaries could affect workers

Jordan Press, The Canadian Press

OTTAWA — A federal department is reconsidering the boundaries that determine how workers in different areas qualify for employment insurance.

Changes to the 64 EI regions, as they’re known, would send political ripples through the country as some workers benefit while others find themselves with tougher hurdles to clear to get benefits.

Documents obtained by The Canadian Press under the access-to-information law show how fraught the process can be, noting complaints that haven’t subsided after the last change five years ago.

Employment and Social Development Canada is working on a fast-tracked review of the current boundaries that help decide the number of hours workers need to put in to qualify for EI benefits and how much they can receive depending on where they live.

In general, the idea is to make benefits more generous in parts of the country where it’s harder to get work, though a quirk of the system is that it’s based on residency, not where jobs are. Two people who get laid off from the same company at the same time could have different benefit entitlements because they live on opposite sides of an EI-region boundary.

How the department determines where to draw the lines separating EI zones will be different from previous reviews, with the internal documents detailing a plan to emphasize some factors over others, including putting less reliance on unemployment rates.

If all goes according to plan, the department anticipates making recommendations by September 2020 — one year after this fall’s federal election.

“Changes in boundaries need to be made in a very thoughtful manner because any change in boundaries will involve losers and winners,” Social Development Minister Jean-Yves Duclos, who oversees the EI system, said in a recent interview.

Duclos said the objective needs to be making the EI system better and not about picking “who wins and who loses. That would be a political objective.”

Where the lines go can make a big difference in local politics. Alberta has zones centred on Edmonton and Calgary that include some suburban and surrounding rural areas but not others. After oil prices crashed, the Edmonton region was at first excluded from a 2016 boost to EI benefits, leading to complaints from people who worked in the oilpatch but had permanent addresses in the city.

The 2014 review split P.E.I. into two EI zones with boundary lines drawn in a way that benefited the lone Conservative riding in the province: The entirety of the riding of Egmont, covering the western end of the Island, fell into an EI zone where workers needed fewer hours of work to qualify for benefits.

Tory cabinet minister Gail Shea nevertheless fell to a Liberal challenger the next year. Changing the boundaries so P.E.I. is again one region — as the Liberals once pledged to do — could be problematic for rookie Liberal MP Bobby Morrissey, who holds the Egmont seat, where residents would suddenly lose their advantage.

“It’s extremely unfair, but the dilemma — and I can understand this from my colleague Bobby Morrissey’s point of view — is if you go to one system, then there will be a loss to P.E.I.,” said Wayne Easter, a long-time Island Liberal MP. His riding of Malpeque is partly in the EI zone with more generous benefits, partly in the zone centred on Charlottetown that has less generous benefits.

Any time he goes to an event, people in his own party like to point out the Liberals committed to reverse the changes and tell him that if “it isn’t changed, I’m not going to be able to support you.”

Federal officials, Easter said, must ensure there is a “better understanding of how and why” any changes are made.

The last two-year review wrapped in 2018 without any changes, and provided a set of lessons the department plans to apply this time around. A presentation to the department’s top official noted the unemployment rate should be considered separately from other factors when deciding the borders of an EI region.

The documents say that other labour-market factors — such as the kinds of industries, local demographics and the number of seasonal jobs — would provide a better understanding of the differences between neighbouring regions with similar unemployment rates.

Officials discussed using unemployment rates in the review by looking at long-term trends rather than at a single point in time.

The department said the current review started in October 2018, but there is no requirement at the end for the Canada Employment Insurance Commission, which is responsible for the boundary review, to make any changes.

Tornado victims fear rising insurance rates

Sunday’s twister damaged homes, downed trees

Robyn Miller · CBC News

Kim Lussier has had some bad luck with her car lately.

Lussier’s Hyundai sedan has been rear-ended three times in the last year. Then, during Sunday’s tornado in Orléans, a tree fell on it, smashing its rear window.

Now the car sits partly covered by a blue tarp in her driveway, and Lussier is fretting over much her insurance coverage will cost after this latest claim.

I don’t want to be a hostage of the insurance policy.- Kim Lussier, Orléans resident
“It’s hard because you don’t have a choice,” she said Tuesday. “You need insurance, and if you apply elsewhere they want to know your history of claims, so there’s no getting around that…. I don’t want to be a hostage of the insurance policy.”

Some of Lussier’s neighbours on Wincanton Drive have similar concerns about their insurance rates. On Tuesday, fallen branches and other storm debris still lined the quiet residential street off Jeanne D’Arc Boulevard N., near Petrie Island and the Ottawa River.

A large tree on Lussier’s property leaned precariously toward her neighbour’s.

“I’m supposed to retire in a couple of years and I’ve had all of this [bad] luck with extra expenses that impact my savings and my future,” Lussier said.

Waiting ‘all we can do’

Nearby, Mike Mullen was surveying the hole in his roof left by Sunday’s sudden storm. He said he contacted his insurance provider right away.

“We’re just kind of cleaning up and waiting, really. That’s all we can do,” Mullen said.

He was taking a more fatalistic approach to the possibility of rising insurance rates. “It’s an extra cost every month, right? But I don’t know what else we can do. It’s what it is.”

On nearby Lawler Crescent, Debbie Harris said she and her husband are also awaiting quotes regarding their damaged roof.

“I’m not overly concerned at this point, though I am hearing more tornados and things like that [could strike the area], so I would imagine at some point we’re going to see differences,” she said. “Definitely, I would think they’d go up before they’d go down.”

Will rates go up?

Pierre Babinsky, director of communications and public affairs with the Insurance Bureau of Canada, confirmed the storm damage could impact rates, depending on the insurer.

“Generally, premiums will go up once the insurer needs to adjust them to compensate for whatever they have to pay to settle claims,” Babinsky said.

“If it’s a costly year for the insurer and he’s paid more than he’s collected in premiums, then there’s a fair chance that he will raise premiums.”

Babinsky said in 2018, insurers paid nearly $2 billion in settlements related to severe weather across Canada, a historically high amount.

He advises tornado victims to get in touch with their insurance companies as soon as possible and to carefully document everything.

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