PACICC moves forward with inflation-adjusted limits
PACICC moves forward with inflation-adjusted limits | Insurance Business Canada
Insurance News
PACICC moves forward with inflation-adjusted limits
Changes effective in July
Insurance News
By
Terry Gangcuangco
Changes to the Property and Casualty Insurance Compensation Corporation’s (PACICC) personal lines benefit limits are taking effect in July.
The adjustments will see personal property claims limits increase to $520,000 and automobile limits to $415,000. Additionally, the board has resolved to review commercial limits every five years.
Approved by the PACICC board of directors, the implementation of the inflation-adjusted limits for personal property and automobile insurance follows a comprehensive consultation process with the industry in 2023 that garnered substantial backing.
Dave Oakden, the newly elected chair of the PACICC board, stated: “PACICC is a policyholder protection mechanism, and the decision to reflect the impact of inflation in our personal lines benefit limits is an important step forward in our larger modernization agenda.
“It is good news for consumers and is strong evidence of the customer-focus of Canada’s home, car, and business insurance companies.”
PACICC staff conducted extensive research to prepare for the changes, analyzing over 750,000 anonymized claims from member insurers, representing more than 80% of the Canadian property and casualty insurance market. The project reassessed the adequacy of current coverage against the backdrop of rising inflation.
“Limits were first set in 1989, when we were founded, and have only been adjusted a few times in the decades since,” Oakden noted. “We last undertook a comprehensive review of coverage and benefits as our priority issue for 2019, but those adjustments only really caught up for inflation.”
Final recommendations were based on the study and a thorough consultation with stakeholders. The proposed adjustments received unanimous regulatory endorsement from all 13 participating jurisdictions across Canada in March.
“All Canadians have felt the impact of inflation over the last several years, and Canadian insurers have also experienced the consequences in the rising cost of claims,” PACICC chief executive Alister Campbell said.
“The strong support shown by our industry members in supporting this move to embed inflation adjustments in our personal lines limits is a good-faith signal to all Canadian consumers. It should provide all policyholders with an added sense of comfort that Canada’s property and casualty insurance industry is there to protect them, even in the worst-case scenario of an insurer insolvency.”
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