July 11, 2007
FREDERICTON (CNB) - A new 11-territory insurance rating system has been introduced by the New Brunswick government as part of its ongoing commitment to ensure New Brunswickers have fair and affordable insurance premiums.
"Eleven new territories will replace the current, outdated four territories," Justice and Consumer Affairs Minister T. J. Burke said. "The previous territories were based on arbitrary lines drawn on a map with no actual hard data used to support them. The new territories were created based on relevant factors such as traffic patterns and vehicle density, terrain, road conditions, speed limits, crime rates and weather conditions and will create a fairer system for assessing New Brunswick driver's insurance premiums."
Territories are just one factor used to determine rates. Rates are used to determine a premium, which is how much an individual driver will pay for insurance coverage. Other factors include: the driving record of the insured, the CLEAR rating of vehicle (which includes age, value and type of vehicle); the use of the vehicle and the number of kilometers drivers.
Ratings based on age, gender and marital status have been eliminated.
The actuarial analysis shows that the more traffic-dense areas had higher claims costs than rural areas and smaller urban areas.
"It is important the drivers understand that just because you live in an area that has higher claims costs, it does not mean your premium will automatically increase," Burke said. "Territories are only one factor used to determine premiums. Good drivers will continue to see fair and affordable premiums."
The government also plans periodic reviews of new territories to ensure they are monitored and modified to accurately reflect demographic change, highway construction and other relevant factors.
The new territories will be used by insurance companies for 2008 filings.
EDITOR'S NOTE: Justice and Consumer Affairs Minister T.J. Burke will be available to media at 10:15 a.m. today, Wednesday, July 11, on the fourth floor, Centennial Building, 670 King St., Fredericton. MEDIA CONTACT: Mike Comeau, Justice, 506-453-2933.