Alberta Public Car Insurance Petition
Hey guys, I'm thinking of running a petition to institute public automobile insurance in alberta.... I'm sure most of you are aware that british columbia and saskatchewan both have public insurance and pay less then half what we are currently paying.
I'll attach my MLA's response to my concerns as well as some other facts about public insurance.. please post comments and maybe look up some bad points to public insurance.
How many will support me in this?
here is the letter..
Thank you for your recent e-mail regarding car insurance.
Internal figures from the Insurance Bureau of Canada, an industry lobby group, indicate that accident claims increased by only 2.8% in 2002. This contradicts the IBC’s assertion that rising payouts to accident victims have increased premiums, which have risen a whopping 57% according to data from Statistics Canada. The government’s plan to cap awards will therefore not substantially reduce premiums for most drivers. Instead it will widen the benefit gap between Alberta and other western provinces. In addition, the freeze comes too late for drivers who have already seen their premiums skyrocket.
As you may be aware, the Consumers’ Association of Canada has recently come out with a study that shows that public insurance is the most affordable option for Alberta. The CAC study indicates that Alberta auto insurance rates are almost double what they are in provinces with public insurance. Increases have been much lower in provinces with public insurance plans. Since New Democrat governments in BC, Saskatchewan, and Manitoba introduced public insurance, consumers in those provinces have been getting a better deal.
As you may know, I recently outlined the New Democrat Opposition’s position on car insurance. I called for the adoption of a public insurance plan to reduce premiums, make rates fair and improve safety. For further information, please visit here.
At this time, the ND Opposition does not have a petition. However, I would be happy to present one to the Legislature on your behalf. For information on how to correctly format a petition, visit here
Thanks again for writing. Please keep in touch.
Sincerely,
Brian Mason, MLA
Edmonton Highlands
Again, here is some other interesting facts..
Last year alone, auto insurance rates in Alberta increased by 57%.
But accident claims only increased 3%.
Young drivers and seniors pay more, even if they have a clean driving record.
Edmonton drivers pay more than Calgarians.
The Tories responded by locking in the highest rates in Western Canada.
The Conservative government has a plan they say will reduce rates. But by their own numbers, if everything goes exactly as planned, rates will only be reduced by 8%, after a 57% increase last year.
That’s not good enough.
According to the Consumers’ Association of Canada, Alberta insurance rates are 40% higher than in BC, 51% higher than in Saskatchewan, and 57% higher than in Manitoba.
The other western provinces have public auto insurance. They are the only places in Canada where rates have not increased beyond inflation.
Public insurance systems don't discriminate based on age or marital status.
Public insurance systems invest 30 times more on road safety than private systems.
Public insurance systems are far more effective at keeping uninsured drivers off the road.
Alberta needs a better deal on auto insurance.
Alberta needs public auto insurance.
A better deal for drivers:
The ND Plan for public auto insurance
1. A 35% reduction in rates
Public insurance is non-profit. Where private insurance companies have to produce profits for shareholders, our plan would pool profits back into the company in the form of lower premiums.
A public system reduces the costs of having multiple head offices (most of which are in other provinces), adjusters, estimators, and other staff. Public plans have proven able at bringing down costs through the establishment of province wide rates for body shops and other auto repair facilities.
2. A fair system of setting rates
A number of common factors affect what drivers pay for their insurance coverage. These factors include the driving record, claims history, the make, year and model of the vehicle, and purpose for which the vehicle is used.
Private insurers use a number of other factors not used in the public auto provinces to determine rates. These include the age, gender and marital status of the driver.
Our public insurance plan would end such discrimination. Rates would be based upon the driver's driving record, period. Under the ND public auto plan, good drivers would not cross-subsidize bad drivers.
3. Real regulation of rates
It may come as a surprise to many Albertans, but auto insurance rates are regulated. The Alberta Automobile Insurance Board (AIB) reports to the Minister of Finance. The AIB keeps a very low public profile. Applications to increase insurance rates are dealt with behind closed doors, and almost all of them are approved unchanged. The AIB acts as a rubber stamp for the insurance industry.
The New Democrat plan would transform the Automobile Insurance Board from an industry lapdog to a consumer watchdog. Rate increases would be dealt with through an open, public process where consumers would have standing and be heard.
4. Fairness for accident victims – Their day in court guaranteed
The Conservative government recently suggested limiting pain and suffering awards to accident victims as a way to reduce insurance premiums.
While there can be no doubt that this ‘no-fault’ system reduces costs, and therefore premiums, we believe that limiting the rights of victims is too high a price to pay. Accident victims should have the right to take their case to a judge if they feel their insurer, public or private, is being unfair.
Furthermore, the Tory plan was tried in New Brunswick and has failed. Insurance companies in that province happily accepted caps on pain and suffering awards, and kept the same high insurance premiums.
New Democrats would not take away the legal rights of accident victims or limiting their accident benefits as is being proposed by the Tory government’s industry-biased review committee.
5. Tackle uninsured drivers seriously
Uninsured drivers are a by-product of high insurance premiums. As premiums go up, the incentive to drive without insurance increases. These drivers (often drivers most likely to get into accidents) raise rates because those who obey the law end up covering the costs of those who drive uninsured.
Most jurisdictions have at least 5% of drivers operating without insurance. Over 5,000 drivers were charged in Alberta last year for not having valid insurance, and this is likely to be only the tip of the iceberg. The $2,500 fine is often still cheaper than paying for insurance, especially if a driver has had at-fault accidents. Even the insurance industry is asking for better integration between registration and insurance.
In BC, virtually no cars are on the road without insurance. This is because in that province, buying insurance and receiving a license plate are essentially the same thing. That’s because the public auto insurer also provides vehicle registrations.
While in Alberta you can’t register a vehicle that is uninsured, monitoring whether people fail to renew their insurance once a vehicle is registered is difficult.
New Democrats would integrate vehicle registration with the issuance of insurance policies to reduce numbers of uninsured drivers.
6. Invest in safety and accident prevention
In addition to government initiatives to improve traffic safety, public insurance plans invest directly in traffic and road safety programs to decrease accidents, fatalities and claims. ICBC in British Columbia is investing $40 million annually in road safety initiatives.
Under the ND plan, the public insurer would make substantial investments in traffic and road safety and capture the savings in the form of safer roads by reducing claims in high accident areas.
Private insurance companies have no similar incentive to invest in traffic safety. Because private insurers compete for the lowest risk drivers, investment in this area simply increases their costs relative to that of the competitors. Private insurers often just lobby for government spending in traffic safety.
7. Self-financed through driver premiums
The ND public auto insurance plan would is self-financed and involves no taxpayer subsidies. By the same token, it is also important that profits not be diverted out of the public insurance pool to support other government programs. Any dividends paid would by law have to be to policyholders, not taxpayers.
The Alberta Liberal plan for auto insurance would use the Stability Fund as a reserve if necessary. We reject this approach because it would mix tax dollars with premium funds.
Cost: $50 million paid back in one year, with interest
The costs of setting up a driver-owned auto insurance plan are modest. Our plan would use the existing insurance broker network to sell policies and handle claims, thereby keeping upfront costs low.
The Insurance Corporation of British Columbia (ICBC) delivers insurance through 900 private insurance brokers throughout the province (Source: ICBC 2002 Annual Report). Annual operating costs to administer the Autoplan are kept to a minimum.
In Manitoba and British Columbia, the government loaned the money needed for start-up costs. The loan in Manitoba was $320,000 in 1971, and the B.C. loan was $14 million in 1974. Both of these loans were repaid with interest within a year because premium revenue was sufficient to pay claims, overhead and start-up costs.
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