Take it from a Former Industry Insider: The Insurance Lobby’s Demand that Chronic Pain Compensation
Today’s post features McCourt Law Offices’ skilled Senior Litigation Assistant, who still suffers from injuries as a result of being involved in a rear-end motor vehicle accident exactly a year ago today: My name is Rachelle Leger. I am a 40 year-old mother of two children, a lifelong Albertan and a former insurance adjuster with over a decade of experience working on motor vehicle accident bodily injury claims. As an ex-industry insider, I can advise that the keenly competitive Alberta auto insurance business, like many industries, is cyclical. When profitability is high, new insurers enter the market and premiums remain relatively flat, as companies compete for market share. As competition inevitably intensifies, weaker players are exposed and either run away or raise their rates, creating for consumers pronounced differences from weaker company to stronger (perhaps more competently managed) company regarding quoted insurance prices and terms. Especially in a hard market, it pays for consumers to call around and obtain quotes from a number of insurers. Each time a hard market returns, insurance representatives for poorer performers must explain to shareholders and policyholders why their bottom lines are not as robust as insurers with superior profit margins, and why their premiums are consequently rising, often by as much as 15 to 30% more than other competitors in the marketplace. Yet, and this is crucial, even in years when some industry players post underwriting losses, auto insurance companies still register ample after-tax net profits from the massive revenues earned investing premium dollars and accumulated capital.
Post 9-11, when depressed insurer investment revenues triggered a difficult market, it occurred to the insurance industry’s chief lobbying arm/trade organization (the Insurance Bureau of Canada) that blaming cyclical premium spikes on “skyrocketing” injury claims costs could be an extremely effective and lucrative political strategy, even in the utter absence of any factual basis to support that strategy. This “contrived crisis” scheme worked so well in 2004 that it led to the implementation of a regulation capping insurance compensation payable to ordinary Albertans hurt by negligent motorists. So now, despite basic auto insurance rates rising by less than 6% from 2004 - 2018 (far below the rate of inflation), and bodily injury claims frequency steadily declining over the past five years (with claims costs per insured vehicle also trending back downward after a brief surge a few years ago), insurance lobbyists certainly aren’t going to let those facts get in the way of a fresh new “Blame the Victim Campaign” in the hopes of hoodwinking our new provincial government into revictimizing more innocent individual Albertans (mostly women and children) injured by distracted, drunk, stoned and/or reckless drivers. To quote Ronald Reagan, “the nine most terrifying words in the English language are ‘I’m from the government and I’m here to help.’” It is queer how positively aghast some allegedly free enterprise Conservative politicians in our legislature seem at the prospect that an occasional overdue market correction will cause the average cost of an automobile insurance policy to rise, when as a matter of statistical fact, the average cost of automobiles, and of automobile repairs, has risen exponentially higher over the past fifteen years than the average cost of basic insurance coverage for those automobiles. Even with anticipated increases in 2020, Alberta auto insurance is a terrific bang for the buck in terms of the liability and benefits coverage you get for your premium dollar, and is amongst the most affordable standard auto policies in the country as a percentage of disposable income. With about 50 insurers to choose from, as I said before, shop around! My expert advice to our government politicians on the auto insurance file: There’s an Auto Insurance Rate Board. Let the AIRB do its job, stay in your lane, resist any latent socialist urges to engage in needless and harmful marketplace meddling, and ABC -- always be conservative. Given my professional experience in the industry, I am familiar with the conclusive evidence (including the Institute of Chartered Accountants of Alberta’s bombshell investigation in 2006) that the minor injury cap is a notorious example of unnecessary government overregulation triggered by the auto insurance industry’s objectionable and unrelenting lobbying efforts, but you will appreciate why I now take the insurance lobby’s latest contrived crisis campaign personally. You see, on December 11, 2018, I was driving eastbound on Anthony Henday Drive when my car was rear-ended by a vehicle following too closely, causing me to suffer neck pain, back pain and headaches. In the year since the accident, I have treated my ongoing personal injuries with medication and physiotherapy as prescribed by my physician, but I still remain in constant pain. I have long known that thousands of Albertans each year are injured by careless motorists. With prompt and appropriate protocols treatment (readily available and covered by the generous medical expense benefits provided in our standard auto policy), most recover within about 12 weeks in which case, quite frankly, insurance compensation for pain and suffering in the $5,000 range is fair and reasonable. However, I also am well aware (now painfully so) that many other wrongfully injured Albertans suffer traumatic injuries in auto accidents that evolve into chronic pain conditions. I am one of those Albertans. Whether I eventually recover from these injuries or end up with permanent clinical impairment remains to be seen, but either way it’s common sense (and common law) that I should be compensated by the negligent driver’s insurer for my persistent ongoing pain at a figure well in excess of the minor injury cap, which, lest we forget, was always expressly intended by the government that enacted it to apply only to people suffering minor strains and sprains that heal relatively quickly, i.e., within 90 days or so. The whole concept of auto insurance is that we all pay premiums into a pool of funds available to compensate those unfortunate enough to be hurt by reckless drivers. Sure, insurance companies would prefer to simply pocket all the premiums they rake in from captive consumers rather than be legally obliged to fully compensate seriously injured, severely normal Albertans like me for our pain and suffering and loss of enjoyment of life, but that obviously wouldn’t be fair, now would it? The fact that the auto insurance industry is lobbying Alberta’s Treasury Board & Finance bureaucracy for needless regulation to artificially cap private insurer chronic pain and suffering compensation (after persuading the government to get out of the way by scrapping the cap on the rates insurers can charge) is unconscionable and smacks of rank hypocrisy. In the common law of torts, wrongdoers who intentionally or negligently inflict harm are legally liable to fully compensate their innocent victims for pain, suffering and other losses. Fair enough? Power tends to corrupt, but I urge our UCP MLAs to remember your great responsibility to stand up for vulnerable Albertans and resist the insurance lobby’s noxious demand that you further corrupt tort law in our province through unconservative, unnecessary and unfair overregulation. For further information about the insurance industry’s unwarranted campaign to pad profit margins by rate-shocking policyholders to both boost revenues and create a contrived crisis conducive to lobbying politicians to slash or outright eliminate pain and suffering compensation available to innocent injured auto accident victims, please browse through our numerous blog posts published earlier this year on the subject, and check out our info page as well. Also, the website Fair Alberta Injury Regulations is an excellent source of information on the topic of fair Alberta injury regulations. And of course, feel free to contact us.