What the Insurance Industry Wants: Reduced Rights and No-Fault Insurance
The Government of Alberta is reviewing Alberta’s auto insurance system. One idea the government is considering – pushed hard by the insurance industry – is “No-fault” auto insurance.
“No-fault insurance” means that if you are hurt or your vehicle is damaged in an accident, your insurance company pays for your losses, regardless of who caused the accident. If you are a victim in an accident caused by a careless driver, you cannot sue for damages from them. Whatever an insurance company says, goes. They don’t have to listen to you, your doctor, or even the courts. No-fault takes away your rights and rewards bad drivers for no good reason.
Our concern is potential reforms will take away from vulnerable Albertans only to give even more to the profitable insurance industry. Industry-friendly reforms have been tried recently but failed to deliver premium reductions for consumers. Instead, industry profits have soared.
Curbing Excess Profits
Alberta auto insurance premiums are supposed to achieve a 7% profit target for the insurance companies. But there are no consequences to insurers when they exceed that amount, resulting in large windfalls to these huge corporations. Enforcing a 7% profit cap and putting excess amounts collected into a special fund to reduce premiums in future years would go a long way to ensuring better outcomes for Albertan drivers.
Stand Up For A FAIR Approach
FAIR believes it’s time that Alberta put in place more consumer protections to create a better balance between insurer profits and affordable premiums by more effectively regulating the insurance industry and increasing financial transparency.