New Brunswick Drivers Overcharged for Their Car Insurance

By: Gary Parkinson on November 25, 2012

New Brunswick drivers are paying more for car insurance than they should, according to New Brunswick courts and government opposition parties.  Industry reports show New Brunswick drivers overpaid $71 million for their car insurance in 2011, and paid $800 million more than they should have over the last nine years.  Critics say this proves the entire New Brunswick car insurance system is broken and that the New Brunswick Insurance Board is not protecting drivers.

Opposition groups are particularly upset that New Brunswick drivers paid $169 million more in premiums than drivers in Newfoundland and Labrador, despite identical numbers of accidents and several of the same insurance companies operating in both provinces.  The records show that drivers in both provinces claimed approximately $427 million in accidents during 2010 and 2011.  However, Newfoundland and Labrador drivers paid $569 million for their car insurance, while New Brunswick drivers were forced to pay $738 million.  The discrepancy has left several New Brunswick drivers, lawyers, and politicians confused while the Insurance Bureau of Canada says it also doesn’t understand the difference. 

Criticism has been lobbied at the New Brunswick Insurance Board for not doing its job to protect drivers from unnecessary insurance premiums.  When the Board was first installed in 2004, its mandate was to keep rates set by car insurance companies in line to protect drivers.  But critics say these revelations prove the Board is not looking out for drivers’ best interests, instead choosing to look the other way while insurance companies overcharge on car insurance rates.  NDP Leader Dominic Cardy has called for the Board’s termination in order to install a public system like in Manitoba, Saskatchewan, and British Columbia that he says will protect drivers.

The courts have also expressed dissatisfaction with the Insurance Board’s failure to look out for New Brunswick drivers.  The Board was taken to court by the New Brunswick Attorney General over its refusal to review rates set by the Dominion Insurance Company in 2009.  The Attorney General argued these companies would overcharge drivers in the interest of generating more profit for their companies.  The case went to the New Brunswick Court of Appeal, which reprimanded the Insurance Board for refusing to review the rates.  The court ruled the Attorney General had valid concern for drivers’ well-being, and the Insurance Board was wrong to disregard those concerns so quickly.

In short, drivers in New Brunswick should review their car insurance rates and negotiate for a lower rate in line with other provincial standards.