FACT SHEET

On March 28, 2003, the Government introduced the most comprehensive set of reforms ever undertaken in the province, to bring more fair, affordable and accessible auto insurance for New Brunswickers.

Fairness

Automobile insurance in New Brunswick must be fair to consumers. New Brunswickers must not be subjected to unfair industry practices or unjust underwriting guidelines that prevent them from obtaining the insurance coverage they need. To ensure greater fairness, government will:

• Prohibit insurers from refusing to insure a person on the following grounds:
• age of the person,
• age of the vehicle,
• past claims under the policy for which the person was not at fault,
• missing a premium payment,
• a lapse in coverage,
• that a person insured under a group plan has left the group,
• that a person has been refused coverage by another insurer or had another insurer decide not to renew his or her coverage,
• or that a person is or has been insured by the Facility Association.
• Assess the possible expansion of benefits for accident victims while being mindful of the possible impact on insurance premiums to pay for expanded benefits rates.
• Publish consumer-friendly information that would help consumers be more aware of their choices and the questions they should ask when purchasing automobile insurance.

Accessibility

Automobile insurance in New Brunswick must be more widely accessible to consumers no matter where they live in our province. New Brunswickers must not be prevented from getting the insurance they need simply because of where they live or a lack of choice. To ensure greater accessibility, government will:

• Remove the restriction that prevents insurance companies from rating Third Party Liability in the current territories that exist in this Province. This restriction has caused Insurance Companies to refuse to offer any coverage to the citizens in the northern parts of the Province. These New Brunswickers must turn to the Facility Association and pay rates that are disproportionate for similar coverage. It is presently estimated that approximately 50 per cent of the drivers in Facility Association are covered under Facility Association policies just because there is no other market available.
• Create an Automobile Insurance Review Panel to examine the impact of allowing insurance companies to create their own territories. This will lead to more competition, consumer choice, and ultimately a reduction in the number of drivers requiring Facility Association insurance.
• Consider allowing credit unions and caisses populaires to provide their own automobile insurance products. This will stimulate competition in providing access to more automobile insurance choices.

Affordability

Automobile insurance in New Brunswick must become more affordable to consumers with greater rate stability than we have experienced over the past year. New Brunswickers need to drive; and since insurance is mandatory, they need affordable automobile insurance to allow them to do so. Automobile insurance rates must become more stable and affordable than has been the case. To ensure greater affordability, government will:

• Ensure the Automobile Insurance Review Panel reviews and approves future rate increases, monitor insurance issues affecting both companies and consumers, and undertake analysis and collect accurate statistics on accidents, claims, and industry performance to ensure third-party assessment of the automobile insurance market in New Brunswick.
• Require all insurers wishing to raise their rates by more than three per cent over any twelve-month period to appear before the PUB’s new Automobile Insurance Review Panel to justify their increase.
  
  All insurers will now be required to file their rates at least once every twelve months, and a mandatory review will be required should any insurer file new rates more than twice during any twelve-month period.
• Institute limited, targeted non-economic caps of personal injury claims for minor injuries, such as whiplash, neck and back sprain, and other personal injuries which are non-permanent in nature. However, there will be no change for cases involving more serious or permanent personal injuries. No new limits are being placed on recovery for damages for either economic losses, such as lost wages, or non-economic losses. We will let the current system continue to assess the amount which should be awarded for non-economic damages, such as pain and suffering.
• Reinstate the requirement to show proof of valid insurance before registering a motor vehicle.
• Work with stakeholders to assess the potential for arbitration and other alternatives to resolve disputes at lesser cost.
• Take steps to enhance driver safety as a way of reducing accidents in the first place and, therefore, insurance claims and costs.
• Follow through on recommendations to reduce accidents on highways by examining the effectiveness of more rumble strips, flashing lights at intersections, and other measures.
• Work with the insurance industry in support of their fraud-reduction efforts. Reducing fraud can help reduce claim costs and, ultimately, premiums.
• Allow insurers to offer group rates for automobile insurance.

The Government’s reasonable and balanced plan brings in strong, new amendments and regulations to help stabilize automobile insurance rates. It does not impose a whole new insurance scheme on drivers with drastic changes to how people buy insurance and claim for damages. Rather, it builds upon the existing system with which people are familiar and improves its effectiveness on behalf of drivers and consumers. It has been designed to bring more fair, accessible, and affordable automobile auto insurance to New Brunswickers.