Campaign launched to educate Albertans about the link between legal fees and auto insurance increase
Campaign launched to educate Albertans about the link between legal fees and auto insurance increase | Insurance Business Canada
Motor & Fleet
Campaign launched to educate Albertans about the link between legal fees and auto insurance increase
IBC leader says now is the time for change
Motor & Fleet
By
Terry Gangcuangco
The Insurance Bureau of Canada (IBC) has launched a campaign to educate Albertans about the significant role that escalating legal expenses and litigation fees play in increasing auto insurance rates.
The multi-media awareness campaign, dubbed ‘LowerLegalFees,’ will be supported by a website that will provide further details on how these legal costs are contributing to higher auto insurance premiums.
Aaron Sutherland, IBC Pacific and Western vice president, said: “Alberta drivers deserve an auto insurance system that is affordable, sustainable, and that ensures they get the care they need after an accident. 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.”
Citing data from consulting firm MNP LLP, the IBC said lawsuits and legal fees linked to insurance claims currently constitute about 20% of a driver’s premiums for mandatory coverage in Alberta.
“On April 26, the Alberta government launched a public consultation intended to help inform action to make auto insurance more affordable,” Sutherland noted. “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.
“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.”
In a bid to enhance the current system, Alberta’s auto insurers have proposed a plan that would allow drivers to select new coverage options. The approach promises more control over their insurance and potential savings while doubling benefits for injured motorists.
Alongside regulatory and tax improvements, the initiative could reduce annual auto insurance costs by an average of $325.
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