The review of automobile insurance in the province can’t come soon enough for the industry, customers, taxi drivers, and lawyers who fight for people who are injured in car crashes.
Insurance companies want government to put a cap on soft-tissue claims as other provinces have done, but a lawyer says people would be giving up their rights to fair compensation for minimal return on premiums.
Don Forgeron of the Insurance Bureau of Canada says capping soft-tissue claims is the only way to bring rates down, but St. John’s lawyer Steve Marshall disagrees.
That’s what they have done in the Maritimes, but Marshall says people there are unhappy with the results.
He says giving up the right to claim what he calls fair compensation would be the difference of about five dollars a week in insurance premiums.
The real problem, according to Marshall, is that the industry is making too much profit – $100-million in Newfoundland and Labrador in 2016.
He says their profit margin is 22.5 per cent. In most businesses, a profit margin of 6 or 7 per cent is very good, so insurance rates can come way down.
Cab Driver Doug McCarthy says their average cost of insurance for one car is about $10,000 a year for a perfect driver, and about $13,000 for somebody who’s new to the industry.
He believes it’s the soft-tissue claims that have the most profound impact on rates.
He says you can’t dispute or disprove a sprained back or stiff neck, but he hears stories of somebody who’s been off for a year or two yet still manages to go to Tae Kwon Do and gets a settlement of $40,000 or $50,000.
Injured Workers NL is the latest to take exception to Forgeron’s comments.
Trish Dodd says any time she hears someone talk about reducing one’s rights, that doesn’t sit well with her. She agrees that she too is paying high premiums, but she doesn’t believe a cap is the answer.
Dodd says a soft tissue injury can greatly take away one’s quality of life, and though it may sound minor, soft tissue injury can lead to further complications and chronic pain.