NLIS 1
November 14, 2002
(Government Services and Lands)

 

Minister responds to insurance concerns raised at St. John�s City Council Meeting

Walter Noel, Minister of Government Services and Lands, shares concerns about escalating downtown insurance rates raised by Councillor Frank Galgay at this week�s City of St. John�s council meeting. Council intends to request the department to investigate the issue.

Minister Noel said: "We deal with and investigate this issue practically every day. Unfortunately, the problems are market driven, and there is little anyone can do to control rates. However, we can generally ensure coverage is offered even though rates and conditions may not be what people would like. Last week we advised consumers of what should be done if they are having problems.

"Our officials work with consumers, insurance companies, the Insurance Brokers Association of Newfoundland and the Insurance Bureau of Canada to determine the best means of dealing with problems.

"Homeowner insurance rates are not regulated in our province, or any other province. The coverage is provided by private insurance companies who set their own rates and guidelines based on market and competitive conditions. Government has no ability to require coverage or set rates. But even where we have such power in regulating auto insurance rates, people are still having problems getting coverage at acceptable premium costs.

"The reality is that insurance costs and restrictions are increasing everywhere. Companies have been losing money and cannot be forced to provide insurance at unprofitable rates. If we try to force them to do so, they will withdraw from the business.

"We are doing all we can to make the market as competitive, efficient and transparent as possible. But policy holders have to pay the entire cost of providing insurance. The most effective means of controlling prices is to minimize the cost of claims. Insurance costs are a growing portion of household and business expenses. We all have to cooperate in doing everything possible to control these costs."

Last week the department issued the following advice for consumers:

  • When shopping for homeowners� insurance, consumers should keep a list of the brokers contacted and the insurance companies the brokers represent.
  • If coverage is denied, consumers should find out the reasons for the denial.
  • If unsuccessful after contacting several brokers, consumers should call the Insurance Brokers Association of Newfoundland (IBAN) at (709) 726-4450. (IBAN now has a process in place to assist consumers by putting them in contact with a broker who will work with them as they attempt to obtain insurance.)
  • Consumers who are still unsuccessful after contacting IBAN are advised to contact the Insurance and Pensions Division of Government Services and Lands at (709) 729-2602 or (709) 729-2593. (At that point a departmental officer will contact the Insurance Bureau of Canada on their behalf.)

The minister said: "Mayor Wells encourages consumers to shop around. This is always sound advice. It is also good to know, as has been reported, that the mayor is not aware of any person who could not find insurance after testing the market."

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

2002 11 14                                      11:15 a.m. 


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