Nova Scotia introduces auto insurance reforms
The Nova Scotia government has introduced new auto insurance reforms that it says will:
- allow drivers involved in a collision caused by another party to deal with their own insurer to collect property damages
- ensure automobile insurers cannot increase premiums for collisions where no claim was made and the driver paid for the damage themselves, even if the driver was at fault
- help victims of automobile collisions access treatment more quickly for minor injuries
- enhance mandatory no-fault benefits including medical, rehabilitation, funeral, death and loss-of-income benefits for all drivers
- give Nova Scotians a choice to buy an optional full-tort product for minor injuries, giving them the right pursue further compensation
- ensure automobile law in Nova Scotia will be reviewed every seven years
Under the changes, benefits for medical and rehabilitation expenses, funeral expenses, death benefits, loss of income and principal unpaid housekeepers expenses would increase as follows:
Medical and Rehabilitation expenses: Currently: $25,000 – New benefit: $50,000
Funeral expenses: Currently: $1,000 – New benefit: $2,500
Death expenses:
- Head of household: Currently: $10,000 – New benefit: $25,000
- Spouse of head of household: Currently $10,000 – New benefit: $25,000
- Dependent: Currently: $2,000 – New benefit: $5,000
Loss of income: Currently: $140/week – New benefit: $250/week
Principal unpaid housekeeper: Currently: $70/week – New benefit: $100/week
The legislative portion of the reforms are contained in the Fair Automobile Insurance (2011) Act, which will be introduced in the House of Assembly today. New regulations will also support the changes.
These reforms are based on recommendation from an independent auto insurance review, which included consultation with the insurance industry, stakeholders groups and Nova Scotians. When making decisions about the reforms, the province also looked at cost analysis provide by the Utility and Review Board.
To allow the insurance industry enough time to prepare new products and processes and train staff, the reforms will be implemented in two phases with effective dates April 1, 2012 (PDF) and April 1, 2013. (PDF)
The Insurance Bureau of Canada (IBC) says it supports the direction of Nova Scotia’s auto insurance reforms, but does warn that proper implantation is essential.
“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, in a statement. “This government’s approach to auto insurance reform is an example of how to do it properly.”
He added: “But it will be critical to implement the reforms properly, with a full understanding of the complexity of the task ahead. The insurance industry looks forward to working with the government to help make this happen.”
