Seniors groups in the province say that over the past several months — while the Public Utilities Board (PUB) is carrying out its review of automobile insurance in the province — they have been discussing the implications of possible changes to automobile insurance on its members.
The result is the formation of an umbrella group called Seniors Against Insurance Cap.
“While seniors are concerned about the cost of auto insurance, we have become increasingly concerned about the impact proposed insurance caps would have on seniors in our province,” Robert Rogers, chair of the group, said in a news release.
“Many seniors no longer drive, yet they could become the victim of a car accident, either as a pedestrian or passenger. A cap on insurance claims would have detrimental impacts on these innocent victims, leaving them vulnerable financially and with no ability to challenge the outcome of a settlement. As well, many seniors that still drive a car are not in favour of an imposed cap on accident claims that would limit the ability to receive fair compensation.”
The PUB was requested by the provincial government to review and report on a number of issues with respect to automobile insurance in the province, including the reasons behind increasing claims costs for private passenger vehicles and taxi operators, and options to reduce these costs.
The board was specifically asked to examine the impact on rates and implications for claimants of introducing a monetary cap on claims for non-economic loss for minor/mild injuries or continuing with the current deductible of $2,500 or increasing the deductible.
The Insurance Bureau of Canada (IBC) has suggested, as part of a package of proposed reforms, that the province can help stabilize the auto insurance industry by replacing the existing $2,500 deductible with a $5,000 compensation cap on minor injuries. Compensation caps, the IBC says, have been proven in other jurisdictions to contain bodily injury claim costs and keep premiums stable.
"Our proposed package of reforms is designed to meet three objectives," Amanda Dean, IBC’s Atlantic Canada vice-president, told public hearings held this summer.
"Those objectives are to stabilize premiums by reducing and stabilizing bodily injury claims costs, improve health outcomes for people injured in collisions by providing access to treatment based on current medical evidence and by having appropriate accident benefit levels, and making it easier for people to repair and replace their damaged vehicles."
Lawyers representing accident victims groups at the hearings said accident victims will lose their right to sue for fair compensation should a compensation cap be imposed in the province.
A number of witnesses, including experts, have presented their opinions at the public hearings on both sides of the issue.
In a recent news release, the IBC says the bottom line is that the province needs a sustainable and affordable automobile insurance product that helps injured people get better quicker and puts cost controls in place for everyone who pays for an auto insurance policy.
The IBC says the average premium in Newfoundland and Labrador is now over $1,100 per year. The average in New Brunswick is $819, Nova Scotia $842, and P.E.I. $796 where forms of minor injury compensation caps are in place.
“Much has been made that a minor injury cap will take away drivers’ rights,” the IBC release states. “This is just not true. The cap has been misunderstood and does not take away the rights of a person to sue if they are legitimately injured and require additional care.”
The seniors groups, however, are urging the provincial government not to impose a compensation cap on minor injuries. More than 15 seniors organizations have come together to form the Seniors Against Insurance Cap organization.
“We represent thousands of Newfoundlanders and Labradorians who simply do not agree with capped insurance payouts to victims of accidents,” the group’s release states.
“We strongly urge (the government) to consider how caps on insurance will negatively impact seniors in this province and limit their ability to receive fair compensation if faced with being the victim of a car accident.”
The groups making up Seniors Against Insurance Cap include:
• Newfoundland and Labrador Public Sector Pensioners Association;
• St. John’s Fire Fighters Retirees Association;
• NAPE Retirees Local 7002;
• Retired Teachers Association of Newfoundland and Labrador;
• Retired correctional officers (represented by NAPE);
• National Association of Federal Retirees (NL);
• Canadian Association of Retired Persons (CARP), St. John’s Avalon Chapter 1;
• Marine Atlantic Pensioners Association;
• Silver Lights Retirees (NL Power & NALCOR);
• CBC pensioners;
• Royal Newfoundland Constabulary Veterans Association;
• Lillian’s Law;
• Newfoundland and Labrador 50+ Federation Inc.;
• Save Our People Action Committee (SOPAC); and
• Spinal Cord Injury Newfoundland and Labrador.
