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Nova Scotia announces auto reforms | Canadian Insurance
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Nova Scotia announces auto reforms

The changes could cost the average driver $7.50 more per year, says the province's Utility and Review Board.

Drivers injured in an accident will see mandatory no-fault benefits double under a series of auto insurance reforms announced Wednesday by the Nova Scotia government.

Under the changes, the benefit for medical and rehabilitation expenses would go up from $25,000 to $50,000. Death benefits to the head of a household would jump from $10,000 to $25,000.

The minister responsible, Graham Steele, said current benefits are out of date and in need of a revision.

“No-fault benefits … is something most people don’t think about until they are injured, but the rates were set in 1982 and haven’t been increased since,” said Steele. “That is something that people when they are injured will appreciate.”

Another change would give drivers the choice of buying additional coverage for minor injuries that would give them the right to sue.

Steele said he hoped the changes would not result in a significant increase in premiums, but added it would take time to see how various insurance companies react. He said the government will be telling insurers that increases will not be permitted for the first year the changes take effect.

“Let’s get a year’s experience under our belt so that we know what your (insurers) actual costs are under these reforms and then if an increase in premium is necessary you can apply for it,” said Steele.

The minister pointed out that the province’s Utility and Review Board has said making the changes could cost the average driver up to $7.50 more per year in premiums.

In addition, Steele said insurance companies would no longer be permitted to penalize a driver who has paid collision damages out of his own pocket.

The changes largely follow the recommendations of a report released in June that reviewed the province’s auto insurance system.

Steele said the first phase of the changes would be introduced April 1, followed by a second phase a year later.

IBC Responds

Insurance Bureau of Canada (IBC) supports the direction of Nova Scotia auto insurance reforms announced today, but expressed concern regarding the complexity of implementation issues associated with such comprehensive changes.

“IBC applauds the Nova Scotia government for its direction with these reforms and the thoughtful and consultative process that led to them,” said Bill Adams, vice president, Atlantic, IBC. “This government’s approach to auto insurance reform is an example of how to do it properly. But it will be critical to implement the reforms properly, with a full understanding of the complexity of the task ahead.”

Adams added: “These reforms will better serve collision victims, and ensure that they get the treatments they need to get well. At the same time, we are cautiously optimistic that the additional claims costs anticipated as a result of the reforms do not adversely affect the affordable price of auto insurance for all Nova Scotia vehicle owners over the long term.”

The changes announced today represent phase two of the Nova Scotia government’s auto insurance reforms, following initial ones made in April 2010, which tripled the minor injury pain and suffering damages cap to $7,500, indexed it to inflation, and amended the definition of a minor injury.

 

With files from The Canadian Press

This article was originally published November 8 and updated November 9