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Government set to triple insurance caps on minor injuries

The NDP is moving to strike down the current insurance ceiling on minor injuries and replace it with a more victim-friendly cap.

The NDP is moving to strike down the current insurance ceiling on minor injuries and replace it with a more victim-friendly cap.

The $2,500 cap on minor injuries is being tripled to $7,500 and tied to raises in inflation. Mirroring Alberta, the definition of “minor” injury is being strictly limited to strains, sprains and whiplash.

Finance Minister Graham Steele said insurance profit margins overshot projections since the cap was put in place in 2003 and drivers will still be able to pay about the same rates.

“We are absolutely confident that these changes can be absorbed without an increase in automobile insurance rates,” said Steele.

“We get what I would call the best of both worlds. We get a better insurance regime and we get it at no additional cost to Nova Scotians.”

However, the plan will not apply retroactively. The new rules will only be applied to accidents that happened from yesterday onward. The NDP had opposed the cap since it was introduced by the John Hamm-led Tories, but Steele said retroactivity would have hefted an estimated $69-million bill onto insurance companies and thrown rates into radical uncertainty.

The insurance industry wasn’t as confident as Steele that rates won’t go up, saying it will take time to figure out.

“They’ve come up with a set of reforms this morning that will add costs to the auto-insurance system,” said Bill Adams of the Insurance Bureau of Canada. “What the effects are going to be for Nova Scotians and for premiums, we don’t know at this time.

Every year insurance providers must have their rates approved by the Utility and Review Board.

Steele said the province will eventually make it mandatory for all insurance providers to offer a “full-tort” option without any cap, though they haven’t worked out the pricing for that system.

 
 
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