No-fault insurance drives up costs for commercial fleet owners


“They are basically their own insurer because their fleet insurance policy has such a large deductible or no coverage at all”

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The province’s new no-fault auto insurance overhaul is starting to hit commercial fleet operators in the wallet as they try to recover from the pandemic.


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Bill 41 – the Insurance Amendment Act (Improving Driver Accessibility and Care) – was passed in 2020, but the Direct Compensation for Property Damage (DCPD) part of the legislation ) came into force on January 1. The bill aims to give drivers more consistent treatment and faster response to collision claims.

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For businesses such as taxi companies, car rental agencies and others that operate a wide range of company vehicles, it has become a multi-million dollar sinkhole.

Craig Hirota, vice president of government relations and member services for the Associated Canadian Car Rental Operators (ACCRO), said it would cost members $5 million in the first year alone.

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“They are basically their own insurer because their fleet insurance policy has such a large deductible or no coverage at all,” he said. “If our vehicles are hit by a non-responsible driver, all expenses for which we would normally have sued the responsible party’s insurance company will come directly out of the business owner’s pocket. This will directly affect their bottom line.


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He added that the DCPD does not benefit fleet owners who have a good driving record or who have taken steps to mitigate risk.

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Kassandra Kitz, spokeswoman for Finance Minister Travis Toews, said in an emailed statement that the bill has already cut key rates for individuals. She said the DCPD eliminates the need for legal disputes between insurance companies and provides greater cost predictability on various types of vehicles.

She noted that the effect on fleets will depend on a number of variables, but it’s a change that other provinces have already implemented.


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“Alberta is the last jurisdiction with a private auto insurance system to offer DCPD,” she said. “In all other jurisdictions, fleet companies have been able to adapt to the changes successfully.”

Kurt Enders, president of Calgary Checker Cabs, said while other provinces have done so, the process hasn’t been smooth. He said his colleagues in Ottawa and Toronto are still being hit by higher insurance rates amid falling incomes during the pandemic.

Enders said the Calgary franchise is expected to have an impact of nearly $2 million on its bottom line due to DCPD when its fleet is at full strength.

“It took the right from us, which we used to do, to isolate ourselves from a third party who hit our vehicle,” he said. “If a car was written off, we had all these capabilities to recoup our losses, and now it’s 100% borne by us.”


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A line of Checker Cabs along Palmer Rd. NE.  Thursday February 17, 2022.
A line of Checker Cabs along Palmer Rd. NE. Thursday February 17, 2022. Photo by Brendan Miller/Postmedia

Calgary Checker Cabs currently operates around 500 taxis, down from a pre-COVID high of 840.

Each of Enders’ taxis travels between 80,000 and 100,000 kilometers a year, and the company records around 360 no-fault claims a year – a number that rises to around 600 in non-pandemic years.

He said they had an insurance review in December and their premiums had gone up slightly, but when the DCPD came into effect their costs went up. Their deductible for a claim on one of their taxis is about double the cost of a new taxi – repairs average between $3,000 and $5,000, which prevents them from using their insurance.

Costs, in Enders’ case, cannot be passed on to the customer since their rates are controlled by the City of Calgary. In turn, they had to raise driver fares while they absorbed the rest of the increase. Enders said that increase on drivers, depending on the company, is typically between $25 and $50 per week per driver.


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Not all fleet operators are affected by the DCPD program. The City of Calgary, for example, insures its own fleet and does not purchase auto insurance.

The province said DCPD adds $18 to the policy for each of its vehicles. The province’s website reports 55,210 government vehicles registered in 2021.

For ACCRO, this makes recovery all the more difficult. Rental fleets have been decimated during the pandemic and are still struggling with travel restrictions and supply chain effects, making it difficult to replenish fleets.

Hirota said they had discussions with the province about their concerns, but had received no assurances that changes would be made to the legislation.

“We don’t want to remove DCPD, all we’re asking for is an opportunity for the Government of Alberta to fix DCPD and provide an exemption for commercial fleet owners,” he said. . “If a commercial fleet owner determines that DCPD is not working for them, then they can opt out.”

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Twitter: @JoshAldrich03



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