The Insurance Bureau of Canada is calling on the government of Newfoundland to take immediate action in order to achieve auto insurance costs that are stable and more affordable.

In submitting its response to “Proposals for Automobile Insurance Reform,” IBC is calling on Walter Noel, Minister of Government Services and Lands, to move ahead with the plan. “Over the past decade, auto insurance costs have more than doubled throughout most regions of Newfoundland and Labrador,” says Don Forgeron, IBC Vice President, Atlantic Region.

“Over the next three years, costs are projected to jump another 47% unless changes are made to the auto insurance system in the province. Ignoring the problem is not a viable option,” he says.

Forgeron points to repeated studies where there is conclusive evidence that shows the cost of settling soft tissue claims is the largest single factor in the rising cost of auto insurance.

Dealing with options, Forgeron suggests governments representing nearly 70% of Canada’s population have already placed restrictions on the right to sue — in some cases eliminating it entirely. Forgeron believes the approach outlined in the consultation paper is very moderate in nature, serving to restrict compensation only for pain and suffering awards for less serious injuries.

“No alternatives have been suggested either in Newfoundland and Labrador or in other jurisdictions which can produce the necessary long term significant savings.”

In preparing its response, IBC consulted with consumers to hear first hand, their thoughts on the proposed changes. “We’ve learned that over-compensation for minor injuries must be stopped if costs are to be reigned in,” says Forgeron.

“We’re urging the government to take the crucial next step to incorporate the substantive reforms into legislation that achieves an appropriate balance between automobile insurance costs and fair compensation.”