Minister says drivers, industry and government must work together to control insurance costs

Walter Noel, Minister of Government Services and Lands, is concerned about forecasts of significantly higher automobile insurance rates being made by the Insurance Brokers Association of Newfoundland and Labrador and the Insurance Bureau of Canada.

Insurance rates must be approved by the Public Utilities Board. They are based on the cost of accidents and other expenses of insurance companies. The increasing cost of personal and property claims is causing the industry to seek substantial premium increases. 

Minister Noel says: "Automobile insurance rates in this province are already quite high. Government will do everything reasonable to ensure they rise no more than necessary. Industry must do likewise. Our officials are monitoring developments to ensure that any rate increases are justifiable.

"Government is examining various means to keep rates as low as possible. Drivers also have to do all they can to reduce the number of accidents and the cost of personal and property damages. I would welcome consumer comments on these matters. Citizens who wish to provide their views on insurance rates can contact the Insurance and Pensions Division at (709) 729-2593 or e-mail insurancerates@gov.nf.ca

"The insurance industry says the increased cost of claims for minor soft tissue injuries are a major cause of the need for rate increases. Government is reviewing the evidence and considering options which could reduce the cost of such claims. The industry contends that rates could be reduced if consumers were prepared to restrict the right to sue for minor injuries which do not result in financial loss. Some lawyers and consumers find such an option unacceptable. We would like to know what citizens think about such proposals. Do they really want to pay higher rates in order to preserve this option for the relatively few people likely to benefit from it?

"Government is also considering imposing restrictions on benefits for those driving without insurance or while impaired, and requiring insurance companies to inform drivers placed in the high risk Facility Association of the exact reasons they are placed there, and trying to find ways to reduce the percentage of drivers in facility. We are also investigating ways that consumers can settle claims by dealing primarily with their own insurance companies, and looking at making more coverage mandatory."

Media contact: Rick Callahan, Communications, (709) 729-4860. 

2001 07 23                                               12:15 p.m.