Auto insurers keep quiet on large rate hikes in N.B. during campaign in N.L.

A campaign by auto insurers in Newfoundland and Labrador highlighting low premiums for clients in New Brunswick uses figures from 2016 — but doesn't mention that those rates have increased substantially since then.

"People in other provinces pay a lot less than we do," an actress portraying a frustrated Newfoundland mother says in a recent Insurance Bureau of Canada (IBC) ad directed at drivers in that province.

"We need affordable car insurance now."

Newfoundland and Labrador is contemplating significant auto insurance changes to try and lower premiums in the province and through the IBC campaign, companies are actively pushing for the adoption of specific reforms.

The woman in the ad directs viewers to an industry website for more information — betterautoinsurance.ca — which shows how much lower auto insurance rates are in provinces that have adopted restrictions on the payment of some accident injury claims, including New Brunswick.   

"Provinces with a cap on minor injuries have lower rates — and drivers still get the coverage they need after a collision," says the website.

Readers are directed to a chart that shows the average auto insurance premium in New Brunswick, which has injury caps, is $789. That's 29 per cent less than the average in Newfoundland and Labrador.

But those numbers are from 2016 and most insurance companies operating in New Brunswick have long since raised rates, or applied to raise rates substantially, with warnings of worse to come in the years ahead.

For example, Allstate Insurance was charging New Brunswick drivers slightly less than the provincial average in 2016 — $767 per vehicle — but just finished a hearing before the New Brunswick Insurance Board where it asked for average rates of $954 — 24 per cent higher than 2016.

Security National, which charged an average 2016 premium in New Brunswick of $797, has an application on file to charge average premiums of $1,000 in New Brunswick beginning in July.

'No other option'

New Brunswick's largest insurer is Wawanesa. It has raised prices three times since 2016 by a combined 22.8 per cent, including 11.7 per cent this year. But during its hearing this year it told the Insurance Board it really needs another 16 per cent increase on top of the earlier increases to meet profit targets and will be back to the board to ask for it in future years if its finances do not improve

"We now have no other option in New Brunswick," said the company in its presentation. "We have limited our rate increases. However, loss costs are escalating. With our policyholders' best interests in mind, we will increase our rates over the next few years until we obtain rate adequacy."

Auto insurance premiums are still cheaper in New Brunswick than in Newfoundland and Labrador but the gap is not nearly as wide as the $328 difference being advertised to consumers.   

IBC Atlantic vice-president Amanda Dean said the organization does not know what the current 2019 difference is between average premiums in New Brunswick and Newfoundland and Labrador but acknowledges the 2016 numbers are stale and need to be updated.

"We've been using the newer [2017] numbers in some of our communications pieces in the Newfoundland market,  Clearly we need to go back and update the numbers on that site," said Dean.

Dean says the IBC started its campaign in Newfoundland and Labrador last year, and at the time 2016 data was the latest available.

Numbers show average premiums increased $30 per vehicle in New Brunswick in 2017, but she said the much larger increases charged to drivers by IBC members in the province in 2018 and planned for 2019 — up to $150 per car extra — are not fully available to be used.  

Average premiums in Newfoundland and Labrador in 2017 increased $15 per vehicle, half as much as in New Brunswick.