EDMONTON, AB, May 15, 2024
/CNW/ - Today, Insurance Bureau of Canada (IBC) launched a campaign to inform the
public of the impact that runaway legal costs and litigation fees
are having on the auto insurance premiums that Alberta drivers pay.
Across the province, the LowerLegalFees campaign will
reach Albertans through advertisements on billboards, newspapers,
radio, the web and social media. A dedicated website will also
provide additional facts about how legal costs are driving up their
premiums.
"Alberta drivers deserve an
auto insurance system that is affordable, sustainable and that
ensures they get the care they need after an accident," said
Aaron Sutherland, Vice-President, Pacific and Western, IBC.
"That's why we need to have an honest conversation about what's
driving the cost of premiums in this province. The majority of
Albertans injured in a collision make a claim and receive the
benefits they need to recover. However, some personal injury
lawyers are using aggressive marketing and advertising to encourage
frivolous claims, which drive up costs for everyone. As a result,
the legal costs involved in claims settlements are now more than
double the cash payment provided for pain and suffering for those
injured in collisions. Change is needed, now."
A recent report by consulting firm MNP LLP found:
- Lawsuits and legal fees associated with insurance claims have
soared 31% in Alberta since 2018
and now account for about 20% of a driver's premiums for mandatory
coverage.
- Between 2018 and 2022, over $1.2
billion of the premiums drivers paid went to legal costs
associated with claims.
- Legal settlements following a collision are now three times
higher in Alberta than anywhere
else in Canada.
- Approximately 38% of settlements paid to people injured in a
collision go toward the legal costs resulting from litigation.
That's more than twice the share that goes to the claimant to
account for pain and suffering.
"On April 26, the Alberta government launched a public
consultation intended to help inform action to make auto insurance
more affordable. In doing so, the province released two reports
that provide further evidence of the enormous financial impact that
litigation costs and legal system abuse are having on auto
insurance premiums," said Sutherland. "This new analysis found drivers
can save hundreds of dollars annually if legal costs are brought
under control. There is no longer any debate: to deliver savings to
drivers, Alberta must move
urgently to address the legal costs underlying premiums."
Alberta's auto insurers have
put forth a proposal that would improve today's system by allowing
drivers to choose new coverage options, giving them more control
over their coverage and helping them save money, while doubling
benefits to those injured in a collision. Combined with regulatory
and tax improvements, this proposal could save drivers an average
of $325 annually on their auto
insurance.
About Insurance Bureau of
Canada
Established in 1964, Insurance Bureau of Canada (IBC) is the national industry
association representing Canada's
private home, auto and business insurers. Its member companies make
up the vast majority of Canada's
highly competitive property and casualty (P&C) insurance
market.
As the leading advocate for Canada's private P&C insurers, IBC
collaborates with governments, regulators and stakeholders to
support a competitive environment for the P&C insurance
industry to continue to help protect Canadians from the risks of
today and tomorrow.
IBC believes that Canadians value and deserve a responsive and
resilient private P&C insurance industry that provides
insurance solutions to both individuals and businesses.
For media releases, IN Focus articles, or to book an interview
with an IBC representative, visit ibc.ca. Follow us on LinkedIn, X
and Instagram, and like us on Facebook. If you have a question
about home, auto or business insurance, contact IBC's Consumer
Information Centre at 1-844-2ask-IBC. We're here to help.
SOURCE Insurance Bureau of Canada