Listen Live
HomeNewsAdvisory committee tables major overhaul to auto insurance model

Advisory committee tables major overhaul to auto insurance model

The Government of Alberta is proposing changes to overhaul the Automobile Insurance Compensation Model in what it calls an effort to make automotive insurance more affordable and increase medical benefits for Albertans injured in collisions.

Grande Prairie – Wapiti MLA and Minister of Finance Travis Toews appointed an advisory committee in December 2019 to explore possibilities for the potential rework. The report, released Thursday, lists 89 conclusions, citing the reform as “necessary”, according to Committee Chair Chris Daniel, a consumer and insurance industry expert.

The report also contains 37 recommendations for a redesigned accident compensation model. Currently, the insurance rate in Alberta is the third-highest in Canada. Daniel says the cause of escalating automobile premiums was due to constant increases in bodily injury loss costs, notably lump-sum awards for pain and suffering resulting from the taught system litigation process.

“Since there was nothing in the system to control those increases, premiums would continue to rise over the long term and create an even more serious pricing problem,” he says.

- Advertisement -

The committee is recommending the replacement of the existing system with a pure no-fault traffic accident care and compensation model. The new model suggests potential cost reductions to most consumers between 9.4 and 10 per cent, while more severely penalizing reckless driving.

Shelley Miller, the legal expert appointed to the committee, says the new model would deter risky driving through increased enforcement and penalties for traffic infractions, as well as higher insurance premiums for reckless drivers. Toews says before any steps are taken to potentially implement the recommendations for Bill 41, more consultation with the public is necessary.

“Because of the magnitude of that change, we believe it’s important to make the report available to Albertans to review and provide feedback on this key recommendation before final decisions are taken.”

Toews adds more details on the next steps with respect to the recommendations will be shared “soon”.

- Advertisment -
- Advertisment -
- Advertisement -

Continue Reading