Published May 07, 2024 • 3 minute read
It’s no secret that over the past four years, auto insurance companies in Alberta have enjoyed unpredecented record-high profits billions of dollars in excess of target benchmarks set, but inadequately enforced, by the Auto Insurance Rate Board (AIRB).
Insurance industry profits are generated by insurers collecting and investing as much money as they can in premiums while paying out as little as they can in claims. These excessive profits are great news for auto insurance corporations, but bad news for overcharged policyholders and undercompensated auto accident victims.
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Adding insult to injury, insurance lobbyists have been busy over the past four years urging the Alberta government to legislate changes to the existing auto insurance system. Under our current tort law (fault-based) system, Albertans injured by reckless drivers have the right to recover monetary compensation from at-fault motorists’ insurance companies for pain and suffering, income loss, medical expenses and other damages.
However, the Insurance Bureau of Canada (the chief lobby group for the insurance industry) is asking the provincial government to confiscate those freedoms from Albertans and then allow insurance companies to sell a severely corrupted version of those rights back to those of us willing and able to pay a hefty premium surcharge, estimated by the IBC in the $200 per year range.
Under the IBC’s proposal, Albertans hurt by careless motorists would no longer be entitled to compensation from at-fault drivers’ insurers. Instead, innocent injured car crash victims would have to rely on their own insurance coverage for benefits. This is a form of no-fault system, under which rights and responsibilities are shifted so that bad drivers are rewarded with more benefits and lower premiums, while good drivers end up paying extra and yet lose crucial compensation if they are injured by a negligent driver.
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Combining the rates of both good and bad drivers, an actuarial study commissioned and recently released by the Alberta government calculated that IBC’s proposal would result in a paltry $17-per-year reduction in the current average annual premium. By way of comparison, the Alberta Civil Trial Lawyers Association notes that had the AIRB been holding insurers to its own target profit provisions, the average Alberta household would have saved over $600 per year in car insurance premiums over the past four years.
Albertans have a strong sense of justice, moral clarity and common decency. We value law and order and individual rights, and firmly believe that wrongdoers should be held responsible for their actions and must fully and fairly compensate those they hurt. It is a fundamental principle of corrective justice that culpable tortfeasors are legally liable (through their insurers) to financially compensate the people they injure for the pain, suffering and other losses wrongfully inflicted upon those injured victims.
Albertans know that there is a price to be paid for negligence causing harm, and that our government should not expropriate freedoms from innocent injured car crash victims in order to unjustly enrich reckless drivers and the multibillion-dollar, multinational corporations that insure those guilty wrongdoers.
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A poll conducted by Janet Brown Opinion Research and released last month shows that a solid majority of Albertans prefer our current tort law system over the insurance lobby’s idea of switching over to a type of no-fault auto insurance scheme. This follows a previous poll conducted last year indicating that most Albertans think insurance premiums should be reduced by trimming excessive insurer profits rather than by removing the rights of good drivers and innocent injured auto accident victims.
If you want to have your say on this issue, consider this your call to action: A survey is available on the Alberta government’s website until June 26, 2024, and takes about five to 10 minutes to complete. Our government has heard plenty from insurance lobbyists, but invites input from ordinary Albertans. Now is your chance to weigh in.
Mark McCourt is an automobile accident injury lawyer and principal counsel of the firm McCourt Law Offices in Edmonton.
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