Personal injury lawyers vs auto insurers
Two days worth of hearings are to begin for Alberta automobile insurance concerning their rate board as of this morning to decide just how much driver are to be expected to pay in basic premiums as of November 1st.
This argument is to occur specifically between the personal injury lawyers and the insurers with but one client representative to argue their side.
The auto insurers are expected to stress the point that they are currently having to deal with far higher costs than they should be, which are in turn meaning they need higher premiums. Lawyers on the other hand will explain that the industry is doing perfectly well as it is, taking a healthy if not incredibly good yield.
A report is going to be released by the Canadian Bar Association which will argue that the injury claims costs were never a problem or out of their control as insinuated by the insurance industry, in fact insurance companies in Alberta have made over 20 per cent profit between the years 2003 and 2006 after taxes.
"The insurance industry has a very effective lobby group and there has to be a voice on the other side of this debate," said Tom Achtymichuk, an Edmonton lawyer and past Alberta president of the bar association.
This said, in February the Minor Injury Regulation of four years, which put a $4,000 limit for individuals claiming for pain and suffering experienced due to minor soft-tissue injuries like whiplash, was diminished in a Calgary Court of Queen's Bench ruling. Insurance companies felt that if they were being asked to pay out thousands more per successful claim, the premiums for drivers would have to be pushed up.
One source from the industry has revealed that they will be calling for a 37 per cent rise in the obligatory section of the insurance, which is basically a retaliation to the incredibly likely higher payouts which will result fro the lifting of the cap. This would lead to an all around premium hike of around $200 per year for Alberta drivers.
While many are going by this information, another report made regarding the insurance rate board has suggested that the compulsory rate hike will be only 11 per cent.
"I'm sure the consumer won't like it," said Jamie Hotte, vice-president of underwriting and marketing at Peace Hills General Insurance.
"But the big piece of this is we would have increased our rates only four per cent in four years, if not for the strike down of the Minor Injury Regulation. It's caused this. So the product has changed."
In the case that the appeal of the ruling is successful the claims should stay with a $4,000 limit and the extreme jump in cost wont need to be followed through.
The bar association report is in disagreement, suggesting that even if insurers are not covered by the minor soft tissue injury cap, they will still make an earning of around 12/16 per cent .
If insurers are aiming to continue making good money, with a yearly profit of above 20 per cent, and with the $4,000 cap in action, the average premium will need to go up by $112.
Updated on 18/06/2008