December 10, 2002 by Canadian Underwriter
The industry’s pool for insuring high-risk drivers is asking the Newfoundland Public Utilities Board to approve a 41% hike in rates in that province.
The Facility Association (FA), which offers mandatory insurance coverage to drivers who have been refused in the voluntary market, will go before the board to make its request tomorrow. The increase would apply to less than 5% of drivers in the province, who have joined FA for reasons such as a poor driving record, a history of accidents, missed premium payments or the type of car driven, or to what use it is put.
This follows on the heels of applications in Nova Scotia and New Brunswick for increases well into the double-digits. The increases are necessary to offset high losses in the region, says FA CEO Dave Simpson.
“A request for a 41% increase is significant, but the reality is, we’re simply targeting a break even price level,” he says. “There is no profit in the increase. If gaining a profit was the intent, the increase would be even higher.”
In Newfoundland, insurers were assessed $1.5 million to cover FA losses this year alone.