New Brunswick Insurers Plan to Lower Auto Rates

The Insurance Bureau of Canada (IBC) has announced an action plan to bring premium rates down quickly throughout the province of New Brunswick. It’s being adopted in response to government pressure and public outcry over N.B’s high cost of auto insurance.

“Private insurance companies have been in New Brunswick since before Confederation and we want to remain here providing competition and choice to our customers,” stated Stan Griffin, IBC President and CEO. “We have listened to the Government and to the people and we realize that we must move quickly to provide real solutions that will drive auto insurance rates down and ensure the long-term viability of our industry in this province.”

Griffin explained the components of the plan as follows:
1. A ‘No Frills’ auto insurance policy proposal delivered to the office of Premier Bernard Lord in Fredericton today. This proposal emphasizes a “driver’s choice” approach to auto insurance, while ensuring drivers have the same liability protection currently required by law. ‘No Frills’ creates a buy what-you-need insurance environment while maintaining an unchanged level of service on, for example, the claims settlement side.
2. A commitment to remove an additional 7,200 New Brunswick drivers out of the high-priced Facility Association by August, 2004, leaving FA with 2.5 percent of New Brunswick drivers;
3. The introduction of a new toll-free consumer help line to assist New Brunswickers with their exit from Facility Association and their search for lower rates;
4. The launch of a new consumer information campaign to reinforce consumer understanding of the rights available to them through the government’s new reforms;
5. The launch of a community outreach initiative this summer to educate New Brunswickers about how to properly adjust their headrest to prevent serious neck injury in the event of a collision.

“While it’s true that government designs the insurance product we sell, we understand we have to be part of the solution,” Griffin continued. “We believed the reforms recently introduced by government would help to solve the problem, but it’s become painfully clear that we need to accelerate the process. We are presenting to government an option today for a ‘no frills’ policy. Every element of the no-frills proposal emphasizes a ‘driver’s choice’ approach to auto insurance in New Brunswick.”

He also indicated that the options to be presented “for a customized product extend far beyond what the industry has tabled with government. ‘No frills’ provides the opportunity for government to provide significant savings on a buy-what-you need basis.”

“Our proposal is in direct response to the government’s commitment to New Brunswickers,” added Griffin. “It’s government that designs insurance ultimately. We believe our tabled option is a good starting point for discussion.”

The IBC noted the importance of reducing the number of drivers in Facility Association, calling this step a “key component of the plan.” It said, “although progress has been made and some consumers have seen large rate reductions when they moved to the lower priced regular market, Facility Association still accounts for 4.4 percent of the New Brunswick auto insurance market. Historically the market share is 2 to 3 percent.”

“The industry has been working diligently to find new auto insurance coverage for those drivers that do not belong in Facility Association and would be better served in the regular market. But we have heard the message – it’s not happening fast enough. We are committing publicly to change that,” Griffin stated. The new consumer help line will support the effort to reduce the number of drivers insured by Facility Association and provide consumers with the information they need to find the best possible insurance rate. “Many Facility Association policyholders don’t realize they are in the high risk market,” Griffin added.

“Beginning this week, New Brunswickers with rates well above the provincial average can call 1-877-UASK- or the IBC [1-877-827-5422] to determine if, in fact, they are in Facility Association. If they are, and if they qualify for insurance in the regular market, we will help get them a policy. If they are not, we will provide useful information that will help them shop for better rates,” said the announcement.

Topics Carriers Auto