Auto insurance reforms in Ontario, Alberta and Atlantic Canada deliver $6.8 billion in savings



    TORONTO, Aug. 16 /CNW/ - Canada's home, car and business insurers
announced today that consumers have enjoyed nearly $7 billion of auto
insurance premium savings since insurance reforms were implemented in 2003 and
2004 in Ontario, Alberta, and Atlantic Canada. Today's analysis is based on
the latest data available from the General Insurance Statistical Agency
(GISA), a government body that collects data on premiums recorded for every
private passenger vehicle in those regions of the country.
    After nearly four years of declining auto insurance premiums (2003-2007)
in provinces with private auto insurance delivery, Insurance Bureau of Canada
believes it is important to provide both a summary and a regional breakdown of
the premium savings that have been delivered to consumers.
    "Reaching nearly the $7 billion mark is an unprecedented level of savings
for consumers," said Stan Griffin, IBC's President and CEO.
    "In every region of the country where insurers compete for the business
of consumers, auto insurance reforms have delivered substantial savings for
drivers. These benefits are the direct result of efforts by auto insurers and
governments across the country to design and implement auto insurance reforms
focused on the best interests of consumers," Griffin added.

    Here is a detailed breakdown of the provincially-based reforms and the
resulting savings to consumers.

    Ontario

    Average premiums in Ontario have decreased from approximately $1,499 per
vehicle in November 2003 to $1,260 in June of 2007, a reduction of nearly 16
per cent for consumers.
    Since November 2003, auto insurers have worked with the Ontario
government to bring about these savings through the following key reforms.

    
    -   Getting people with whiplash related injuries into treatment faster,
        with fewer assessments, thus using health care resources more
        effectively

    -   Ensuring greater fairness among the fees of health care providers
        operating within different parts of the health care system

    -   Providing greater consumer protection against sometimes unscrupulous
        paralegal representatives

    -   Reinforcing that the purpose of auto insurance is to direct needed
        accident victims to treatment rather than cash settlements that may
        not be applied to rehabilitation

    -   Making sure that the focus of court access for further benefits is on
        claimants that have suffered serious and permanent injuries
    

    "The savings we have seen in Ontario since the 2003 reforms represents
the largest premium reduction ever seen in Canada," says Mark Yakabuski,
Vice-President, Federal Affairs and Ontario, and incoming President, IBC.
    "For Ontario drivers, it means an aggregate savings of $4.5 billion," he
added.

    Alberta

    In Alberta, Canada's second largest private auto insurance market, reform
efforts have provided savings for consumers of $1.13 billion. From the peak in
2004, when premiums were, on average, $1,182 to current average levels of
$1021, prices have declined by nearly 14 per cent.

    
    Reforms to Alberta's system included the following;

    -   a limit to the pain and suffering court awards ($4000) for minor
        injuries resulting from a collision, but more money allocated for the
        care required to return an accident victim to health. These reforms
        did not affect eligibility for health care benefits and income
        replacement coverage.

    -   Pain and suffering awards for more serious injuries remain unchanged.

    -   A direct-to-insurer billing system that permits injured accident
        victims to obtain treatment with no delays.
    

    "While Albertans across the board benefited from these savings, the
reforms featured a strong focus on young drivers, arguably the most notable
beneficiaries of these identified savings." said Jim Rivait, VP, Prairies,
Northwest Territories and Nunavut, IBC.

    Atlantic Canada

    Total savings available to consumers in Atlantic Canada amounted to
$1.17 billion.
    According to Don Forgeron, Vice-President, Atlantic, IBC, these savings
are a direct result of auto insurance reform efforts that focused on rising
pain and suffering awards for minor injuries. Governments in Nova Scotia, New
Brunswick and PEI introduced a limit of $2,500 for the compensation paid out
as pain and suffering awards for minor injuries sustained in a motor vehicle
collision. As was the case in Alberta, these reforms did not affect access to
health care benefits or income replacement coverage available to all accident
victims. Pain and suffering awards for more serious injuries were also not
affected by the reform legislation.
    In Nova Scotia, reforms saw premiums drop from an average of $1,048 in
November 2003, to $800 in June 2007, an average reduction of nearly 24%,
representing cumulative savings of $426.3 million for consumers.
    In New Brunswick, auto premiums have dropped significantly from an
average high of $1,259 in 2003 to current average of $797.
    This is a reduction of nearly 37% as a result of government reforms
introduced in 2003 and 2006 providing savings of $493.5 million. In addition,
government introduced a first-chance discount to give young drivers a break on
their coverage as long as they maintain a clean driving record. New Brunswick
drivers receive one of the best insurance deals in Canada: generous no-fault
accident benefits coverage, access to the courts for serious injuries and low
premiums.
    In Prince Edward Island, peak premiums in 2003 of $881 have since dropped
as a result of government reform efforts to an average of $745, resulting in
savings of $27.9 million for Island drivers or nearly 15.5% less than at the
peak.
    Changes in Newfoundland and Labrador have also achieved significant
savings for drivers. Auto insurance premiums have declined, on average, from
$1,126 in 2003 to $887 as of June 30, 2007, a reduction of 21%. Drivers have
realized savings of $221.8 million in the last four years.
    "With these savings of the last few years, it is evident that Atlantic
Canada drivers continue to benefit from some of the lowest auto insurance
premiums in Canada," said Don Forgeron.
    Savings are based on the difference between the highest premium value in
2003 (or 2004 depending on when reforms were introduced) and the lowest
premium value each year multiplied by the number of vehicles for the
corresponding year.

    Insurance Bureau of Canada is the national trade association of the
private property and casualty insurance industry. It represents more than 90%
of the non-government home, car and business insurance in Canada. To view news
releases and information, visit the media section of IBC's website at
www.ibc.ca.





For further information:

For further information: John Karapita, (416) 362-2031 extension 4351;
In Ontario, contact Mark Yakabuski, VP, Federal Affairs and Ontario, and
incoming President, (416) 362-2031; In Atlantic Canada, contact Don Forgeron,
VP, Atlantic, (902) 429-2730; In Alberta, contact Jim Rivait, VP, Prairies,
Northwest Territories and Nunavut, (780) 423-2212; In British Columbia,
contact Lindsay Olson, VP, British Columbia and Yukon, (604) 684-3635; In
Quebec, contact Daniel Demers, VP, Quebec, (514) 288-1563


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