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Consumer advocate says insurance companies should have introduced price hikes slowly
New Brunswick’s consumer advocate for insurance Michèle Pelletier said she thinks insurance rates are soaring because companies avoided going in front of the New Brunswick Insurance Board for years. New Brunswick’s Consumer Advocate for Insurance, Michèle Pelletier, said insurance price hikes could have been rolled out over a number of years to make it easier on…
New Brunswick’s consumer advocate for insurance Michèle Pelletier said she thinks insurance rates are soaring because companies avoided going in front of the New Brunswick Insurance Board for years.
New Brunswick's consumer advocate for insurance thinks auto rates are on the verge of soaring because companies avoided justifying increases in front of the New Brunswick Insurance Board for years.
In New Brunswick, every insurance company must file premium and rate increases annually. If they file for an increase under three per cent, companies don't have to appear before the board.
“They avoided coming and now they have to come ask for the big increase,” said Michèle Pelletier in an interview with Information Morning Moncton.
Companies are blaming the need for big increases on the rising cost of vehicle repairs and an increase in accidents caused by distracted driving.
Pelletier said, while that is true, companies would have started to notice these trends a few years ago.
She said they should have been asking for larger increases in years past.
“For a consumer it's much harder on a budget to have a 30 per cent increase than a six per cent, little increase, each year,” said Pelletier.
But Amanda Dean, vice president Atlantic for the Insurance Bureau of Canada, said companies avoid hearings with the board because it can cost more than $100,000 to go through the process.
She said yearly appearances could have resulted in even higher rates, because companies would also be trying to earn back money spent on board hearings.
“It is the cost of doing business and that process needs to be recouped,” said Dean.
“We're not saying, by any stretch of the imagination, to let insurers charge what they will. We understand as an industry that the government wants to have oversight. But is there a better model, a better process?” said Dean.
Pelletier said there are likely more big rate increases to come.
To help manage them, Pelletier said it's important to focus on what you can control.
She recommends bundling home and auto insurance, shopping around at different companies and keeping a clean driving record.
“There's more than 40 companies doing business in this province, ask your broker some questions.”
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