Canadian Underwriter

Public Survey on Auto Cover Reveals Dissatisfaction

November 1, 2003   by Canadian Underwriter

Print this page Share

An independent survey of Canadian drivers across the provinces suggests that 75% of the public believe that the provincial governments should impose limits on rate increases with an equal number of respondents believing that cover price increases should not exceed the annual inflation rate for those with clean driving records. The survey of 1,017 Canadians was recently carried out by NFO CFgroup.

The survey also suggests that the private property and casualty insurance industry has not been effective in conveying its reasons for the rate increases applied to auto insurance. Roughly 72% of the respondents believe that insurers have brought in upward price adjustments to increase their profits. There is also a perception that insurers are acting in response to losses incurred through the 9/11 terrorist attacks and the overall decline in value of the equity markets. However, only 38% of the respondents agree that these are valid reasons.

In contrast, almost 66% of the survey respondents agree that the rise in auto premium rates relate partly due to the costs of settling personal injury lawsuits, frivolous and fraudulent claims, and rising vehicle repair costs. But, only 28% of the respondents feel that auto accident victims having suffered minor injuries should not be entitled to compensation. Approximately 63% of those surveyed also believe that the cost of auto insurance has risen as a result of increasing cost of repairing vehicles. Nearly two-thirds of Canadians think that auto repair shops charge more when they know that the cost will be covered by insurance, the survey suggests.

Furthermore, the survey asked respondents in provinces with private and public-run auto insurance systems whether they were happy with the status quo or believe that alternative systems should be introduced. In this respect, 44% of the total respondents from British Columbia, Saskatchewan and Manitoba (provinces with public-run auto insurance) say they support switching to a privately-run auto insurance system while 42% are against such a plan. In contrast, 50% of respondents living in provinces with private auto insurance systems say they are in favor of switching to a publicly-run system, while only 25% are opposed to such a switch.