JSMedia – The government of Alberta has struck a panel to look at auto insurance rates. The government has decided to scrap the rate cap and implement a collaborative no-fault model. While change would be welcome, Chris Daniel says the process is difficult and will require a cultural shift. To ensure the reform is a success, the government is asking for feedback from consumers, health professionals and the insurance industry. The review panel will make recommendations to the provincial government in the coming months.
The province’s finance minister is trying to find ways to cut premiums by reducing the rights of injured parties to sue for pain and suffering. However, the report suggests that the right to sue for pain and suffering should be eliminated. This will ultimately result in higher premiums. Personal injury lawyers have also taken issue with the findings of the report, which was provided to the treasury board and the finance department in November.
The previous NDP government put the cap in place in 2004. In 2008, the government enacted the cap. It is not the most effective solution, as the increase in the average amount of personal injury awards is too large. The new UCP government is committed to addressing the problem by taking action as soon as possible. But the province has another way to go. It can implement changes within its privately delivered system.
Alberta Strikes Panel to Review Auto Insurance Rates
Despite the thorny issue of rising costs, auto insurance in Alberta continues to be a valuable protection for drivers. While it is the most affordable province in Canada, many Albertans are not getting adequate coverage, which means the government needs to reform the auto insurance sector. The five-per-cent annual rate cap imposed by the former NDP government failed to address the issues. The cap merely forced insurers to make savings through refusing coverage.
The proposed changes will make the current system more efficient. The current system involves an adversarial courtroom conflict, delays, and duelling experts. The proposed changes will focus on the costs of insuring drivers. The aim is to reduce premiums and ensure a more equitable system for consumers. The United Conservatives also want to reform the rate cap. They removed the annual five-percent cap in 2017, which led to an increase in new premiums.
In the past, the no-fault system led to higher premiums. In Alberta, the no-fault system has made claims to a minimum of $2,000 and even more in some cases. The no-fault system has also resulted in increased injuries and payouts for minor injuries. While the policy has been in place for over two years, the government is now under pressure to raise rates.
The new auto insurance system is based on a partial no-fault system. In Ontario, the government has capped global rate increases at five per cent per insurer starting in 2017. This cap did not last long and some drivers have reported receiving rate increases of up to 12 percent. The cap also forced insurers to cut the amount they pay for minor injuries, resulting in a larger average claim. The government’s decision on the new policy has already put the government under pressure to raise interest rates.
The province’s government has agreed to the cap, but the government has not renewed it. The proposed change will be controversial. The insurers have been unable to cover the costs of the policy under the cap. The UCP government has also rejected the cap. The auto insurance industry is losing money in Alberta under the cap. During that time, the wildfire in Fort McMurray forced insurers to drop many essential coverage and insurance plans.
In August, the UCP government refused to renew the cap and therefore the cap has not been extended. The government has decided to create a panel to review auto insurance rates in Alberta. The goal is to ensure that the increase in rates does not exceed five per cent each year. This is expected to increase the cost of insurance for every Albertan. It should also keep the cap on the overall hike. It should be kept at five per cent.