Improper Auto Reform Will Hike Taxes and Damage Rural Communities

Not addressing auto reform quickly or wholistically will increase taxes and hurt rural Albertans

EDMONTON, AB, May 1, 2024 /CNW/ - While it is encouraging to see government action towards addressing the auto insurance file, the two auto reform reports released on Friday, April 26, 2024, provide a potentially misleading hope for consumers. If the government does not take a comprehensive approach to reform and instead decides to adopt a public auto system to chase the lowest premiums possible, they will damage Alberta communities and be forced to ask for additional taxes from Albertans who are already struggling to make ends meet.

When considered from a community-based economic perspective, implementing a public auto system would do far more harm than good. A shift toward public auto would result in massive job losses across the province and deprive rural communities of the additional functions brokers fulfill, as many small communities rely on their local brokerage to provide registry and financial services as well. A public system would also burden Albertans with a multi-billion-dollar tax bill to implement and maintain.

An optional care-based model is a much more wholistically sustainable and impactful choice for reform, without the additional monetary and social costs of public auto. Legal fees are one of the main driving factors behind inflated premiums. Providing consumers with the option to sue on minor injuries removes unnecessary legal fees from the system, which immediately alleviates cost pressures. Albertans deserve a care-based approach to minor injuries, while still maintaining the right to sue for catastrophic injuries. This system will improve the rate of recovery, reduce litigation costs, and reduce the strain on the court and health care system.

IBAA believes reform needs to happen as quickly as possible in order to give Albertans time to recover from the failing system they have been struggling under for so long. It is time for the government to act and provide sustainable solutions well before their targeted deadline of this fall. We are positioned as representatives of Albertans, to continue to provide feedback to government officials and advocate for lasting and sustainable change. We urge immediate action and a wholistic approach as we enter this critical period for Alberta auto reform.

IBAA is a non-profit trade association representing over 5300 broker members working through about 160 individual brokerages in communities across Alberta, the Yukon, the Northwest Territories, and Nunavut.

SOURCE Insurance Brokers Association of Alberta