Car insurance: price isn’t everything

January 1/2002

Attention News/Business Editors:

HALIFAX, Sept. 10 /CNW/ – The insurance industry, in response to an announcement from the Consumers’ Association of Canada on auto insurance rates in Canada, is cautioning consumers to compare the benefits paid out in claims with the premiums collected. Insurers maintain that auto insurance throughout Atlantic Canada delivers more to consumers with claims payouts that far exceed the levels seen in any province with government-run auto insurance. “I can tell you that this study is as flawed as the last one they did here in Nova Scotia,” says Don Forgeron, Vice President, Atlantic, Insurance Bureau of Canada. “We already have all the numbers on insurance and the average premiums in each of the four Atlantic provinces is lower than the B.C. average of $1,019. When you consider that even the lowest average insurance claim payout in this region far exceeds the average claim paid by the government-run insurer in B.C., consumers here are getting a much better deal” adds Forgeron. “If government-run auto insurance was really such a bargain, shouldn’t it be substantially cheaper for consumers in those provinces, given that claims are quite a bit less than what the private industry pays here?” asks Forgeron. IBC cautions that in general any cross-country comparison must take into account the benefit levels and other factors, such as access to the courts, all of which influence the bottom line premium. “Without looking at the claims paid, you’re really talking apples and orangutans,” says Forgeron. IBC’s figures on auto insurance premiums and claims are based on an analysis of every auto insurance policy in Atlantic Canada. IBC questions the limited data on which the CAC bases its study. “Maybe the Consumers’ Association can explain why they are advocating a government system that costs more than what we have here yet delivers only a fraction of the product for consumers?” adds Forgeron. Insurance Bureau of Canada is the national trade association of the private property and casualty insurance industry. It represents more than 90% of the non-government home, car and business insurance in Canada.

– 30-

For further information: John Karapita – (416) 362-2031 ext. 4351

 

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