New Brunswick consumers face new price shock, this time for auto insurance
CBC
Several major automobile insurance companies are seeking approval to raise premiums they charge in New Brunswick by 10 per cent or more, blaming rising vehicle repair costs, car thefts, falling profits and other troubles.
The requests come as New Brunswick consumers have been battered in recent years by record housing, food and electricity prices and are "struggling to keep up with the rising cost of living," according to the New Brunswick government's recent speech from the throne.
If approved, auto insurance increase requests above 10 per cent will eventually affect more than 200,000 New Brunswick passenger vehicles. Most of the requests still need to be reviewed by the New Brunswick Insurance Board.
Michèle Pelltier, New Brunswick's consumer advocate for insurance, said when consumers receive the next renewal notice from their auto insurance company they should be checking for price changes and looking for better deals if premiums seem unreasonable.
"Always shop around," said Pelletier. "That's one of the things that we can do. Different companies offer different prices."
The province's second largest auto insurer, Definity (formerly known as Economical), has made two applications to the New Brunswick Insurance Board to raise its rates by a combined 22.3 per cent over two years.
The company covers more than 52,000 passenger vehicles in the province, or about one in every 10.
The first instalment of the changes requested by Definity, an 11.47 per cent increase for 2024, was approved and took full effect in New Brunswick in June.
Definity is now back in front of the insurance board asking for a second increase of 9.68 per cent, to take effect next June. The two increases combined will add about $208 to an average policy with the company.
A spokesperson for Definity said an interview about its price changes in New Brunswick could not be arranged. But in an emailed statement, it blamed the increases on its own rising costs.
"Definity's rate changes are a response to the various pressures currently affecting the entire insurance industry," the statement says.
"These include inflation, supply chain and labour challenges, a rise in auto thefts, and more frequent severe weather events."
The changes are not immediate for existing Definity clients, but will show up over time as each customer's current insurance policy comes up for its annual renewal.
Definity's sister company, Sonnet Insurance, which covers an additional 12,000 New Brunswick vehicles, was approved for a rate increase of 22.2 per cent earlier this year and is seeking another 6.85 per cent hike for the spring of 2025.
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