Insurance industry seeking approval for rate hike
Canada's failed experiment with a government-imposed cap on
whiplash claims will come home to roost for drivers this week as the insurance industry seeks approval for a hefty rate hike.
A $4,000 cap on whiplash and other soft-tissue injuries was imposed in 2004 along with a new method of calculating rates, which saved insurers millions of dollars on injury claims and sharply reduced premiums for most drivers.
But in February, a Courts of Queen's Bench judged ruled that the cap violates the Charter of Rights. With the case headed to the Appeal Court in September, drivers have been left in limbo.
The insurance industry wants a 37 per cent increase in the mandatory portion of insurance, which includes basic coverage and third-party liability, but not collision.
For the average Alberta driver, this would work out to roughly $225 a year, because the mandatory portion of auto insurance is about 60 per cent of the total premium in most cases.
Updated on 15/06/2008