By · CBC News
On an ongoing drama of rising car insurance rates unfolding at New Brunswick’s Insurance Board, the consortium of companies that underwrite higher-risk drivers is asking for a premium increase in excess of $1,000 on provincial taxis beginning Jan. 1.
The insurance group, known collectively as the Facility Association, only began implementing its last rate hike on taxis — an 8.4 per cent increase — earlier this month.
The current proposal is to lift those premiums another 20.2 per cent, which would take the cost of insuring the average cab in New Brunswick to $5,906 per year. That would be $1,069 higher than current levels and $2,000 more than they were as recently as 2017.
George Youssef, the part owner of Checker Cab in Fredericton said the rapid escalation of insurance costs, on top of other operating costs, is a serious problem.
“That’s really a killer,” said Youssef.
“[It] stops people from being able to afford to purchase a vehicle on their own and pay the insurance. I mean you’re talking almost $15,000 to $20,000, depending on the vehicle, just to get a car on the road for one year.”
In Saint John, Shelly Orr with Vet’s Taxi agreed.
“In the taxi industry, they’re going to put a lot of people out of work. A lot of these guys own their own cars. They can’t afford another insurance increase.”
Just over 400 taxis are insured with the Facility Association in New Brunswick — virtually all the commercial cabs driven in the province.
The association is a collective of every automobile insurer licensed in New Brunswick and by law must cover car owners who can’t get insurance from regular companies.
Last year the group applied for a 21 per cent increase in taxi rates but after a hearing at the Insurance Board it was allowed only a portion of that.
The board questioned whether insurance companies were inflating costs for services they were providing the association and disallowed most of the increase being asked for.
“The [board] finds the applicant’s filing not to be just and reasonable in its entirety,” Insurance Board chair Marie-Claude Doucet wrote in the final decision.
“The panel recognizes that Facility Association is required to pay fees to its servicing carriers. That said, the panel was provided with no evidence indicating whether these fees accurately reflect the actual costs incurred by servicing carriers.”
Insurance industry not deterred
The ruling allowed rates to be raised after Sept. 1 of this year by the reduced amount of 8.4 per cent, but undeterred, the association has returned and asked for another 20.2 percent on top of that beginning in January.
Youssef hopes the Insurance Board is equally tough this time.
“Well, I hope the board gives us whatever it can because I mean the insurance for the vehicle is almost the exact same as the cost of the vehicle,” he said.
A hearing on the application is scheduled to begin Oct. 1.