The Truth

Before Nova Scotians are asked to give up important rights for the promise of lower insurance premiums, they deserve the full story. The truth is that limiting compensation benefits insurers — but can leave injured people and their families paying the price.

Insurers

Insurance companies are businesses. They are entitled to make a reasonable profit and provide returns to their shareholders. But there should be limits. Insurers should not be able to earn excessive profits at the expense of the rights of people who are injured in car accidents.

When insurers present figures about profits, losses and returns on equity, it is important to understand how those numbers were calculated and what assumptions were used. Financial projections are just that — projections — and their financial reports are based on data created and controlled by the insurers. These numbers — even those submitted to government — must be carefully and independently scrutinized. Otherwise, they must be viewed with caution and skepticism.

The Insurance Industry

Like investing, the insurance industry goes through cycles. There are strong years and weaker years. Investment returns, interest rates, claims costs and economic conditions can all affect an insurer’s financial results. A year of lower-than-anticipated profit — or even several years — should be considered in the context of the industry’s longer-term performance.

When discussing the need for changes, insurers may focus heavily on periods when costs are rising or profits are under pressure. But the full picture matters. Years of strong profits and massive investment returns are the reality of the insurance industry.

Government

Governments understandably want to help people with the rising cost of living, including the cost of car insurance. The insurance industry can offer what sounds like a straightforward solution: limit the compensation available to people injured by negligent drivers, and premiums can be reduced.

But before giving up important rights, drivers should ask an important question: Will those savings actually reach them? Past experience shows that promised premium reductions do not materialize. Meanwhile, limits on compensation mean insurers pay less to people who are injured in accidents and they get to keep more for their shareholders.

And there is an even more important question: Is it worth it? A small saving on your insurance premium may not seem like much of a bargain if you or a family member is seriously injured in an accident and you discover that the compensation and legal rights you once had are no longer there.

Drivers

Like investing, the insurance industry goes through cycles. There are strong years and weaker years. Investment returns, interest rates, claims costs and economic conditions can all affect an insurer’s financial results. A year of lower-than-anticipated profit — or even several years — should be considered in the context of the industry’s longer-term performance.

When discussing the need for changes, insurers may focus heavily on periods when costs are rising or profits are under pressure. But the full picture matters. Years of strong profits and massive investment returns are the reality of the insurance industry.

Who Should Decide?

Insurers have a financial interest in the amount of compensation they pay. Every dollar paid in a claim is a cost to the insurer. That does not mean every decision an insurer makes is unfair, but it does mean the insurer is not a neutral party when deciding how much an injured person should receive.

That is why access to the courts matters. When an injured person and an insurer disagree about the seriousness of an injury or the compensation that should be paid, the courts provide an independent place for the evidence to be heard and the dispute to be decided.

When changes to insurance laws restrict a person’s ability to bring their case before a judge or jury, an important safeguard is lost.

The effort to restrict these rights is ongoing. We need to stand together to prevent further erosion of the rights of injured people — and to advocate for greater access to the courts when injuries and compensation are in dispute.