The Consumers’ Association of Canada says that insurance companies are reaping huge profits from Canadians, while crying the blues.
“Huge profits reported this week by the insurance industry calls for a formal Government review of property and auto insurance rates,” said Mel Fruitman, president of the Consumers’ Association of Canada. “Consumers and businesses have been harmed by the dramatic rate increases the insurance industry has imposed on the public and Governments have done little to protect consumers.”
“While the industry has been pleading record losses it was going about collecting record profits on the backs of consumers and businesses,” said Bruce Cran, national secretary of CAC. The Association last week released its national study on auto insurance rates that showed provinces with private insurance had much higher rates than provinces with public auto. The study may be downloaded from the reports section at www.CACBC.com.
“While private auto insurers in the Maritimes were on the road to $150 million in profits this year they hoodwinked Governments into passing legislation that reduces benefits to victims of auto crashes”, said Cran. “Insurance companies were jacking up premiums by up to 70% while Governments intervened to protect their profits.”
“Are consumers upset, you bet they are,” said Cran. This situation just adds to consumers’ belief that public auto systems are the best way to deliver lower, stable rates, he said. “Governments should consider requiring private auto insurers to do what the Government of British Columbia ordered its public insurer to do in 2001. It gave back to each policyholder in that province a $100 cheque because the insurer was making too much money. That’s what the Governments in the Maritimes should now have the private insurers do in those provinces.”
“It’s not only auto insurance that people are complaining about,” said Cran. “Many people have contacted our association about the huge rate increases in property insurance and the take it or leave it attitude of insurers. This means many businesses can’t afford proper insurance or, if they make a claim, may not be able to buy insurance.” The Consumers’ Association has set up a web-based feedback form for consumers and business people who want to talk about auto and property insurance.
“We invite consumers from across Canada to click on www.CACBC.com and fill out a form that allows a consumer to tell us their insurance story,” said Mr. Cran. “To date, we have received hundreds of stories from consumers who have experienced rate shock.”
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