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Common Questions on Auto Insurance
Reform
1. What changes have Alberta consumers seen since the new automobile
insurance system was implemented on October 1, 2004?
- The new system delivers fair premiums for drivers, effective treatment
and fair compensation for injured victims, and encourages drivers to
be responsible for their own driving habits.
- More than 95 per cent of Alberta motorists – that is, all drivers
except those with driving-related criminal code convictions – received
a minimum five per cent reduction in compulsory insurance premiums effective
October 1, 2004. Premiums for good, experienced Alberta drivers
for mandatory auto insurance have been reduced by a total of 18
per cent since the reforms were introduced. The latest
reduction of three per cent (effective November 2006) was the result
of the second review of compulsory premiums by the Automobile
Insurance Rate Board. Premiums will remain competitive in
the future.
- A rate grid for compulsory insurance is in place for new drivers and
those with poor driving records.
- Inexperienced drivers and occasional drivers were eligible to save
up to up to 75 per cent on what they were previously paying.
- Premiums for both mandatory and optional coverage were frozen from
October 30, 2003 to September 30, 2005.
- Over the summer of 2005, government worked with insurers and brokers
on applying the system's new rules and regulations. For details on how
the reforms apply to your premium, please contact your broker or insurer.
- More information
(overview).
Premiums
2. My teenaged son is shopping for a car, and I’ve heard horror stories
about kids paying rates as high as $6,000 per year. Is this still the
case?
- No. One goal of auto insurance reform was to provide fair insurance
to young drivers by eliminating discrimination.
- We’ve done that. Instead of paying upwards of four, five or even six
thousand dollars a year for third party liability insurance, young and
inexperienced drivers will save up to 75 per cent on what they were
paying previously.
- More information
on premiums for less experienced drivers.
3. What do the auto insurance reforms mean for good, experienced
drivers?
- About 80 per cent of Alberta drivers are good and experienced. These
drivers generally now pay premiums that are comparable with other western
provinces.
- Premiums for good, experienced Alberta drivers for mandatory auto
insurance have been reduced by a total of 18 per cent
since the reforms were introduced. The latest
reduction of three per cent (effective November 2006) was the result
of the second review of compulsory premiums by the Automobile
Insurance Rate Board. Premiums will remain competitive in
the future.
- Cost savings that result from the new system will also benefit these
drivers through more stability and predictability in future premiums.
- As long as good, experienced drivers maintain a clean driving record,
the grid will only serve to cap their premiums and keep them fair and
affordable.
- More information
on premiums for good, experienced drivers.
4. I’ve been driving for years but I have some speeding tickets.
How do the reforms affect me?
- For details on how the reforms apply to your premium, please contact
your broker or insurer.
- Based on your driving record and the region in which you live, they’ll
determine your market rate and your grid rate. You’ll pay the lower
of these two rates.
5. I’ve been driving for 10 years with no tickets and no claims.
Will my rates jump astronomically if I have an at-fault claim?
- No. The new system eliminates this possibility. Should you have an
at-fault collision, your compulsory insurance rate cannot increase beyond
the lowest grid rate.
- More information
on premiums.
6. I'm over 65 years old, still a good driver with a clean record,
but in the past I was turned away from several insurers because of my
age and only quoted high premiums. What do these reforms mean for me?
- Insurers will no longer be able to cancel or refuse coverage on the
basis of age, gender and marital status. In addition, an “all comers”
rule will ensure an insurer will provide insurance to anyone who applies.
- If you have a clean record, you will pay premiums at below the grid
rates in the competitive market.
- More information
on premiums.
7. Government has put the brakes on insurance companies for now,
but what’s to stop them from simply jacking up the rates in the future?
- The government established the Automobile
Insurance Rate Board, which includes consumer and government representation.
The mandate of the board is to set premiums for basic coverage, monitor
premiums for optional coverage and review and approve rating programs
for new insurers entering the Alberta market. The new board will annually
set the maximum premiums for basic coverage that all insurers can charge.
8. How much of the insurance industry’s profit is going back to the
consumer?
- All savings from the reforms will be passed through to consumers through
reduced premiums and enhanced benefits: about $200 million annually.
Injuries, treatment, and compensation
9. What will happen to me if I’m in a collision?
- If you are in a collision and suffer an injury that does not meet
the definition of “minor injury” (sprain, strain or minor whiplash),
then your treatment proceeds essentially as it always did. Compensation
under Section B of drivers’ own insurance for medical and rehabilitation
expenses was increased from $10,000 to $50,000, and several categories
of pre-approved treatment were added, including chiropractic, physical,
psychological, and massage therapy.
- Victims of all collisions continue to have full access to the courts,
and victims with serious injuries are not affected by the $4,000 limit
on compensation for pain and suffering.
- If you suffer a sprain, strain or minor whiplash, your treatment is
set out in the diagnostic and treatment process the province has developed
in consultation with the medical profession, insurance industry, and
injury advocates. These services are pre-approved, so victims do not
have to wait for approval from their insurer for treatment. The treatment
process can get underway quickly after the collision, helping the injured
get back to their normal lives as quickly as possible.
- More information
on treating injuries.
10. Is the new system unfair to accident victims?
- Not at all. The new system ensures fair compensation to collision
victims. For serious injuries, the system operates as it always has.
For people with minor injuries, the new system is designed first and
foremost to get them back to health and their regular way of life –
quickly, efficiently and with no out-of-pocket expenses for the first
12 weeks of treatment.
- All injured people continue to have full access to the courts should
there be any disputes over compensation.
- More information
on compensation and benefits.
11. How much control does my insurance company have over treatment
for my minor injury?
- In the first 12 weeks of treatment, only you and your primary health
care provider control your treatment, as long as the treatment follows
the pre-approved diagnostic and treatment process. Should you and your
treatment provider prefer a different process, you should discuss this
with your insurer.
- After the first 12 weeks, recommended further care will need to be
approved by your insurer on recommendation by an Injury Management Consultant.
- More information
on treating injuries.
12. How is a minor injury defined?
- A minor injury is a strain, sprain or minor whiplash that does not
result in serious impairment. If your condition is more serious, the
cap on pain and suffering compensation does not apply to you, and your
care and treatment will proceed under the normal system.
- If you do have a minor injury, your compensation for pain and suffering
relating to that injury is limited to a maximum of $4,000, and your
treatment will proceed according to the new treatment process.
- More information
on compensation and benefits.
13. What if there’s a dispute over whether an injury is minor or
serious?
- The injured victim can request that a Certified Examiner review their
case; however, both parties involved in disputing the seriousness of
an injury will have to agree with the selection of the Certified Examiner.
- If they cannot agree on a choice, a Certified Examiner will be appointed
randomly by the Superintendent of Insurance from a list prepared by
the College of Physicians and Surgeons.
- More information
on compensation and benefits.
14. If I have a minor injury, I only get $4,000?
- If you have a minor injury, the maximum amount of compensation for
pain and suffering is $4,000. This limit does not apply to economic
losses, which include medical equipment costs, your treatment costs,
lost wages, or other out-of-pocket expenses you may have to incur.
- In fact, due to changes under the new system, there should be few
if any out-of-pocket costs those with minor injuries will have to pay,
as charges for treatment will be billed directly to their insurance
company.
- More information
on compensation and benefits.
16. Let’s say I accept the $4,000 payment from my insurance company
because I’m told I only have a “minor injury”. But then it turns out I
have a serious injury. Can I then get more compensation?
- This situation occurs within the current tort system. Once an individual
settles a claim, they sign a full and final release in which they agree
to release the insurer and the at-fault party from any and all liability
arising from the accident. The proposed reforms do not change this situation.
If their injuries worsen after they have settled their claim, they cannot
seek further damages from the at-fault party.
- People injured in collisions should consider their circumstances and
not sign releases until they are comfortable with how their treatment
is progressing.
17. Will accident victims be denied access to the justice system?
- Not at all. Even a person who has been diagnosed with what qualifies
as a minor injury can disagree with the diagnosis and ask a court to
review the decision. People with more serious injuries can still go
to court as they could under the old system for court-awarded compensation
unrestricted by this act.
18. Did my Section B benefits change?
- Your Section B benefits are those paid by your own insurance policy,
regardless of who is at fault in the collision. These benefits were
increased from $10,000 to $50,000 to improve access to care and treatment.
People access these benefits by completing a notice of claim form from
their insurer that must be completed by their physician.
- Several components of Section B benefits are now pre-approved for
treatments covered by the new treatment process and treatments for more
serious injuries.
- You do not need a referral from a doctor or your insurance company’s
approval to access these benefits if you are seeking treatment related
to your collision, though the pre-approval is subject to dollar limits:
- psychological services (maximum $750 per person)
- chiropractic services ($600 per person)
- physical therapy ($600 per person)
- occupational therapy ($600 per person)
- massage or acupuncture therapy (maximum $250 each per person)
- grief counselling ($400 per family)
- If you require services beyond the dollar value set out, you may still
have access to them but your insurer can ask for a medical assessment.
- More information
on treating injuries.
19. Does the new diagnostic and treatment process apply to serious
injuries?
- The process identifies those with serious injuries more quickly and
get them to the care they need more efficiently. The treatment for serious
injuries is well established and is not seen as a source of concern.
- More information
on treating injuries.
20. Who will monitor the effectiveness of the new system?
- The Automobile
Insurance Rate Board regulates mandatory liability rates and monitors
collision and comprehensive rates. The board has access to statistical
information from insurers that will enable it to set rates effectively.
More information is available from the Insurance
Bureau of Canada. |
