Source: Calgary Herald
By Licia Corbella
Licia Corbella: There are numerous reasons why Albertans should inform Finance Minister Travis Toews why the government should make a 180-degree turn and drive in the opposite direction — fast — from this recommendation
The United Conservative government is considering a no-fault auto insurance system that would strip innocent, injured Alberta drivers of their right to sue the guilty driver.
Albertans are being urged to weigh in on this potentially disastrous road the government appears to be heading down.
Bringing in a no-fault auto insurance system is the key recommendation made by a special government-appointed committee that released its 536-page Report on Fundamental Reform of the Alberta Automobile Insurance Compensation System in September.
There are numerous reasons Albertans should inform Finance Minister Travis Toews — who is in charge of this file — why the government should make a 180-degree turn and drive away from this recommendation.
First, it flies in the face of everything the UCP government claims it stands for and was elected on — that is, smaller government, less red tape, personal responsibility and being a defender of our rights and freedoms.
The report recommends that the age-old right to seek remedy from the courts for the wrong perpetrated against them — a right that dates back to the Magna Carta in the year 1215 — should be abolished to facilitate lower insurance premiums.
Currently, Alberta has an at-fault system in which if another driver crashes into your vehicle, your insurance company contacts the other driver’s insurance company and seeks damages related to that accident. If there are injuries involved, you have the right to hire a lawyer and sue for damages, except for so-called minor injuries such as sprains, strains and whiplash.
British Columbia has a government-run auto insurance system called the Insurance Corp. of British Columbia (ICBC), which B.C.’s attorney general called “a dumpster fire” as it has lost billions of dollars in the past few years alone.
The average insurance premium in B.C. is the most expensive in Canada at $1,832 — more than $500 costlier than in Alberta, which has an average price of $1,316. For a family with four drivers, that’s a savings of more than $2,000 annually.
In Ontario, which has a hybrid system of no-fault for “minor injuries” but still has a tort system for more serious injuries, the average insurance premium is $1,528.
The idea behind a no-fault system, which B.C. has moved to, is to reduce the cost of legal fees that tend to drive up costs and payouts.
Not surprisingly, the Civil Trial Lawyers Association opposes these potential changes, but so do some medical professionals who have formed a group called FAIR — Fair Alberta Injury Regulations.
Under a privately run, no-fault system, your insurance company would pay for your damages and the other driver’s insurance would pay for their damages.
Keith McLaughlin, communications co-ordinator for FAIR, says on the surface it sounds like the no-fault system would cut out some red tape and the adversarial nature of how the system works.
“The problem is, though, wherever no fault is tried, it has failed to bring about a premium reduction for drivers.”
McLaughlin says research shows that no-fault systems create a “moral hazard,” and a “lottery mentality and claims culture.”
Worse yet, the panel’s report recommends creating a Traffic Accident Regulator.
“The Committee is of the view that the Alberta Workers Compensation Board medical panel is an example of a successful model to be emulated.”
If you just choked on your coffee, that’s understandable. It would be like finding a needle in a wrecked car to find people who would describe the WCB as a “successful model to be emulated.”
Regardless of what province you are in, the WCB is considered perhaps the most despised and inefficient government bureaucracy in the country.
“The Alberta Workers’ Compensation model provides a useful example of an administrative structure that delivers the services required for an entire provincial pool of injured persons,” states the report.
What’s more, moving toward a no-fault system would make it much easier for a subsequent government in Alberta to socialize our auto insurance system, costing us all more to have fewer rights — like in B.C., where drivers do not have the option to shop around for cheaper insurance rates.
The Insurance Bureau of Canada is also opposed to the government bringing in a no-fault system.
“The insurance industry does not believe that a pure no-fault system is in the best interest of Alberta drivers,” Celyeste Power, western vice-president of the Insurance Bureau of Canada, said during a telephone interview Wednesday.
“You would need to build a very big, expensive bureaucracy, there would be more red tape to wade through . . . and it wouldn’t actually result in any lower premiums for drivers. Balance is needed to ensure people are getting the care that they require at an affordable rate,” said Power.
She says, however, that for the past three or four years insurers have not made any profits insuring Alberta drivers.
The previous NDP government brought in a price cap on auto insurance while the cost of vehicle repairs and litigation costs have increased.
During a telephone interview, Toews said the price cap was making the industry unprofitable and was resulting in “fewer product offerings for insurance consumers . . . no longer providing collision and comprehensive.”
The government removed the cap and, in the next few days, Bill 41 and related regulations are expected to pass that will exempt more minor injuries from litigation “that do not result in serious impairment.” That should reduce costs, he added.
“We received the committee’s recommendation. We’ve acknowledged that with appreciation, but we’ve made no decisions around it, knowing that it’s transformational change.”
The government plans to make a decision by the spring. In the meantime, he wants to hear what Albertans think. Call his office at: 1-780-415-4855 or email: tbf.minister@gov.ab.ca
Tell the government no way to no-fault.