Corbella: Tell UCP government ‘no way to get debt-free auto insurance’


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Licia Corbella: There are plenty of reasons why Albertans should inform Treasury Secretary Travis Toews why the government should make a 180 degree turn and drive in the opposite direction – fast – of this recommendation

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The United Conservative government is considering a no-fault auto insurance system that would deprive innocent, injured Alberta drivers of their right to charge the guilty driver.

Albertans are being urged to embark on this potentially disastrous path that the government appears to be taking.

Implementing an error-free car insurance system is the main recommendation of a special government-appointed committee that will review its 536-page Report on the Fundamental Reform of Alberta’s Motor Insurance Compensation System in Sept.

There are plenty of reasons why Albertans should inform Treasury Secretary Travis Toews – who is responsible for this dossier – why the government should take a 180-degree turn and move away from this recommendation.

First, it goes against everything the UCP government claims to stand for and was elected for – i.e. a smaller government, less bureaucracy, personal responsibility and a defender of our rights and freedoms.

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The report recommends that the age-old right to seek redress in court for evils committed against them — a right dating back to the Magna Carta in AD 1215 — should be abolished to allow for lower insurance premiums.

Currently Alberta has a fault system where if another driver collides with your vehicle, your insurance company will contact the other driver’s insurance company and claim damages related to that accident. If there is an injury, you have the right to call an attorney and claim damages, with the exception of so-called minor injuries such as sprains, strains and whiplash.

British Columbia has a government-run auto insurance system called Insurance Corp. of British Columbia (ICBC), which the Attorney General of BC called “a container fire” because it has lost billions of dollars in the past few years alone.

The average insurance premium in BC is the most expensive in Canada at $1,832 – over $500 more expensive than Alberta, with an average price of $1,316. For a family of four drivers, that’s an annual savings of more than $2,000.

In Ontario, which has a hybrid debt relief system for “minor injuries” but still has torts for more serious injuries, the average insurance premium is $1,528.

The idea behind an error-free system that BC has moved to is to reduce the cost of legal fees, which increases costs and payouts.

File photo: Calgary Fire, EMS and police investigate a serious car accident involving two cars at 16 Avenue and Deerfoot Trail in Calgary on Tuesday, May 19, 2020.
File photo: Calgary Fire, EMS and police investigate a serious car accident involving two cars at 16 Avenue and Deerfoot Trail in Calgary on Tuesday, May 19, 2020. Photo by Darren Makowichuk/Postmedia

Not surprisingly, the Civil Trial Lawyers Association is against these potential changes, but so are some medical professionals who have formed a group called FAIR — Fair Alberta Injury Regulations.

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In a privately operated no-fault system, your insurance company pays for your damage and the other driver’s insurance for their damage.

Keith McLaughlin, communications coordinator for FAIR, says on the surface it looks like the system would do without flaws to some bureaucracy and the hostile nature of how the system works.

“The problem, however, is that wherever no error is attempted, it has not resulted in 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, the panel’s report recommends establishing a Traffic Accident Regulator.

“The committee believes that the Alberta Workers Compensation Board’s medical panel is an example of a successful model to emulate.”

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 imitated”.

Regardless of which province you are in, the WCB is considered perhaps the most despised and inefficient government bureaucracy in the country.

“The Alberta Workers’ Compensation model is a useful example of an administrative structure that provides the services needed for an entire provincial pool of injured people,” the report said.

Plus, it would be much easier for a next government in Alberta to socialize our auto insurance system, which would cost all of us more to have fewer rights — like in BC, where drivers don’t have the opportunity to shop around for cheaper insurance rates.

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File photo: Calgary Police and Fire Department investigate a crash between a small car and a gravel truck on Sarcee Trail and 128 Avenue NW in Calgary on Wednesday, May 27, 2020.
File photo: Calgary Police and Fire Department investigate a crash between a small car and a gravel truck on Sarcee Trail and 128 Avenue NW in Calgary on Wednesday, May 27, 2020. Photo by Darren Makowichuk/Postmedia

The Insurance Bureau of Canada also opposes the government introducing a debt-free system.

“The insurance industry doesn’t believe that a purely error-free system is in the best interests of Alberta’s drivers,” said Celyeste Power, vice president of the Western United States. insurance agency of canada, said during a telephone interview on Wednesday.

“You would have to build a really big, expensive bureaucracy, there would be more bureaucracy to wade through. . . and it wouldn’t really lead to lower premiums for drivers. Balance is needed to ensure that people get the care they need at an affordable rate,” said Power.

However, she says insurers have not made a profit insuring Alberta drivers for the past three or four years.

The previous NDP government introduced a price cap on auto insurance, while the cost of vehicle repairs and litigation costs have risen.

During a phone interview, Toews said the price cap made the industry unprofitable and resulted in “less product offerings for insurance consumers. . . no longer providing collision and comprehensive.”

The government removed the cap and in the coming days account 41 and related regulations are expected to be passed that will exempt more minor injuries from lawsuits “that do not result in serious disability.” That should cut costs, he added.

“We have received the committee’s advice. We have acknowledged that with appreciation, but we have not made any decisions about it, knowing it is a transformational change.”

The government plans to make a decision in the spring. Meanwhile, 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 there is no guilt.

Licia Corbella is a Postmedia columnist in Calgary

lcorbella@postmedia.com

Twitter: @LiciaCorbella

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