Progressive Conservative Leader Ches Crosbie made some assurances on automobile insurance Wednesday.
The leader of the Opposition said should Premier Dwight Ball’s government bring in a minor-injury compensation cap for automobile accident victims, it would be repealed if the Tories form the government following the next provincial election scheduled for 2019.
“I am serving due notice that if I get the opportunity to form a government, a PC government, and there’s going to be a general election next year, I’m going to repeal whatever interference with people’s rights the Ball Liberal government performs,” Crosbie said.
“There’s no reason to be interfering with the right to compensation as determined in hundreds of court decisions, maybe thousands of court decisions, over many decades across the country. Those rights have been established by the courts considering everybody’s individual circumstances and the needs of society. Leave it alone.”
The province’s Public Utilities Board (PUB) is completing its 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 has been 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 control bodily injury claim costs and keep premiums stable.
“Those rights have been established by the courts considering everybody’s individual circumstances and the needs of society. Leave it alone.”
Tory Leader Ches Crosbie
During public hearings before the PUB, numerous reports, presentations and witnesses addressed both sides of the issue.
The PUB, however, will not make a specific recommendation on whether a minor injury cap should be implemented.
The PUB’s report to government is expected this fall.
Crosbie was speaking Wednesday to people gathered for an event organized by the umbrella organization, Seniors Against Insurance Cap.
Robert Rogers, chair of the group, said 15 seniors’ organizations representing thousands of people in the province make up the umbrella group.
He said seniors are concerned about the cost of auto insurance and are against a proposed insurance cap.
“Many seniors no longer drive, yet they could become the victim of a car accident, either as a pedestrian or passenger,” Rogers said. “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.”
Crosbie said there is no justification to interfere with people’s rights to compensation in the context of automobile accidents.
“We know the rate of accidents is going down and will continue to go down in the future,” he said. “It’s a solution in search of a problem. The industry is profitable. (People of the province) have not been promised by the insurance industry any lessening of their insurance premiums.
“If affordability is the issue, Mr. Ball knows what he can do. He can get rid of that 15 per cent insurance tax he put on all insurance products.”
A statement from the provincial government Wednesday afternoon noted that Newfoundland and Labrador has the highest automobile insurance rates in Atlantic Canada, and the PUB review is focused on identifying opportunities to lower rates to benefit consumers and help bring stability to the automobile insurance industry.
“The Government of Newfoundland and Labrador engaged the PUB in an independent review, and this process is being carried out in an open and transparent manner and has invited input from the public and all stakeholders,” the statement reads. “Both the PUB’s and provincial government’s review processes also include opportunities for the public to share ideas about measures to improve highway safety and automotive accident prevention in Newfoundland and Labrador. Feedback from the review will inform future changes to automobile insurance.
“As announced in Budget 2018, the provincial government is already taking steps in reducing the HST on automobile insurance tax by a minimum of five per cent over four years. By January 1, 2019 the tax will be reduced by two per cent, with further one per cent reductions in 2020, 2021 and 2022. Should improvements to the province’s fiscal situation allow it, government will look at further reducing this tax during this time frame, given it can provide substantial relief to the people of the province.”
Crosbie, however, said the tax should be immediately eliminated.
“I’ve promised to repeal the 15 per cent insurance tax that the Ball Liberal Government has put on the product of insurance,” he said. “Insurance, let’s face it for the most part, is a necessity of life today, so this tax on the necessities of life my government, should I come to power, will be repealing the 15 per cent tax. If Mr. Ball is truly concerned about the affordability of auto insurance, he knows what he can do.”
Crosbie became the leader of the Progressive Conservative Party in the province following his victory in the Windsor Lake byelection on Sept. 20.
Prior to that, Crosbie practised law and, in that past, dealt with automobile accident insurance files.
Crosbie said he is aware that critics, therefore, may say his opinion is biased.
“I have a background in it, although as I have told the group here today, I haven’t touched an insurance-related file in the automobile area in six or seven years,” Crosby said. “So, I have no direct financial interest in this. The reason I am saying that is people can make their own judgements about whether that disqualifies me to have an opinion or whether in fact, maybe, it qualifies me because I do have some understanding of the industry.”