Modifications in Alberta’s insurance regulations have resulted in significantly higher prices for commercial fleet operators.
The province approved Bill 41 – the Insurance (Enhancing the affordability and quality of care for drivers) Amendment Act in 2020. However, legislation about the Direct Compensation for Property Damage (DCPD) provision went into the law early this year.
In a prior statement the previous statement, at the earlier statement, the Insurance Bureau of Canada (IBC) provided assurances that the new rules would not be confused with the no-fault insurance for automobiles.
“This is specifically focused on the car damage. The process that is in place in Alberta allows you to claim damages through your own business and also through the at-fault for injuries. In an interview, that procedure is the same,” explained IBC Western director of industry and consumer relationships Rob de Pruis.
“What’s happening here is that you have to deal with your insurance provider for your vehicle damage when involved in a crash.”
IBC declared that as a result of Bill 41, 42% of motorists would experience a reduction in their insurance premiums for their vehicles. But, the new rules have also led to commercial auto insurers significantly increasing the deductibles of their coverage which has upset commercial fleet owners.
In an interview with the Calgary Herald, Craig Hirota, vice-president of government relations and member services at the Associated Canadian Car Rental Operators (ACRO), said that the changes would cost the ACCRO’s members 5 million for one year.
“They’re the sole insurer since the policy they have for their fleet comes with huge deductibles or even no coverage whatsoever,” said Hirota. “If our vehicles get hit by a driver that isn’t at fault, and we have to pay for the damages which we would normally seek the insurance of the at-fault driver’s company for is going to be taken out of the business’s pocket. This will directly impact their bottom line.”
Calgary Checker Cabs president Kurt Enders said that the business would take a 2 million cost in its bottom line because of DCPD.
“It is now legal for us, as we used to segregate from the other party who hit the vehicle we were driving,” Enders said. “If the car was declared worthless, we could recover our losses. Now it is completely borne from us.”
Calgary Herald reported that Enders taxis cover between 80,000 and 100,000 kilometers every year. Additionally, Enders says on 360 collision claims per year. This number has been as high as 600 in some instances.
Enders revealed to the newspaper that his business went through reviewing its insurance in December and saw a slight increase in the cost of insurance. However, when the DCPD became effective and the escalating deductibles rendered insurance unattainable. The deductible to claim against one of their cabs was near twice the cost of a brand-new cab repair, ranging from $3000 to $5,000. The president added that the cost increase couldn’t be passed along to clients since rates are regulated by the city of Calgary, which means that taxi drivers have to cover the cost.
Hirota said that ACCRO is currently in discussions with the province. However, officials have not given assurances as to whether there will be changes to the regulations.