Nova Scotia auto insurance review recommends changes to Section B Benefits
An independent review of Nova Scotia’s automobile insurance system has been completed, with the final report released on June 2.
Finance Minister Graham Steele says the purpose of the review was to ensure Nova Scotians have access to appropriate coverage and premiums that are fair, stable and affordable.
One of the key study areas dealt with how to improve Section B Benefits. Currently the Section B Benefit schedule is as follows:
Optional Supplementary Benefits Section B – Accident Benefits (SEF No. 48)
(Nova Scotia Only)
| Standard | Enhanced (SEF No 48) |
|
| Medical or Rehabilitation Expenses | $25,000 | $50,000 |
| Funeral Expenses | $1,000 | $2,500 |
| Death Benefit (Head of Household) | $10,000 | $25,000 |
| Death Benefit (Spouse of Head of Household) | $10,000 | $25,000 |
| Death Benefit – Dependent | $2,000 | $5,000 |
| Loss of Income – weekly payment | $140 | $250 |
| Loss of Income – Principal Unpaid Housekeeper, weekly payment | $70 | $100 |
The Final Report contains three options to improve Section B Benefits:
Option 1 – Adopt all elements of SEF 48 as mandatory in the standard automobile insurance policy.
Option 2 – Include all elements of SEF 48 as listed above under Option 1 as part of the standard auto policy, but, include a provision which allows a ‘buy-down’ to a ‘basic package’ – equal to the current existing Section B limits – for those who do not require the enhanced benefits; and
Option 3 – Include all elements of SEF 48 as listed above under Option 1 as part of the standard auto policy, but include a provision which allows a ‘buy-down’ to a ‘basic package’ – equal to the current existing Section B limits – for those who do not require the enhanced benefits. Similarly, include a ‘buy-up’ provision which enables the insured to ‘buy-up’, to, in effect, increase the amount of weekly loss of income payment to the lesser of an established upper limit ($1,000 per week has been suggested) or 80% of the insured person’s gross weekly income from employment.
The report recommends adoption of Option One, believing it would increase the level of Section B benefits to a more acceptable level and, when coupled with the proposal noted above for some measure of indexing, would provide a base that could be enhanced over time. The report also recommends that the three options be subjected to actuarial analysis and the impact of respective options gauged before a final choice is made.
During the Review, CFN Consultants found that very few Nova Scotians purchase enhanced coverage and generally only have access to the standard benefits in Section B coverage.
The report says that Section B Benefits in Nova Scotia have not been adjusted since 2005, with the weekly indemnity payment ($140) not having been adjusted since 1974.
Next, actuarial work will evaluate the cost of recommendations presented in this report. Any government decisions regarding auto insurance reforms will be made based on both the final report and the results of the actuarial work and the implementation of any reforms is expected to commence this fall.
The full report can be found online. (PDF)
