Auto insurance reforms meet with cautious approval
Posted Nov 10, 2011 06:03:52 AM.
This article is more than 5 years old.
Changes coming to Nova Scotia’s auto insurance system are meeting with tentative approval from the industry and politicians.
Under the changes announced Wednesday, 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.
Another change would give drivers the choice of buying additional coverage for minor injuries that would give them the right to sue.
Carolyn James at the Insurance Brokers Association of Nova Scotia says it’s high time the benefits for medical and rehabilitation expenses were increased.
“Those limits have not been reviewed since 1993 and it’s well past time that they were,” she said.
The Opposition Liberals were mostly supportive of the reforms, but were concerned about affordability.
“Overall, the thing to be watching for will be the impact on premiums,” said Diana Whalen. “But the changes look good. Some of them are improving consumer protection, they are improving the payouts if you are injured.”
Finance Minister Graham Steele says he doesn’t expect any big increases in premiums for drivers, but Insurance Bureau of Canada regional Vice-President Bill Adams says the issue is complicated and the impact on prices remains to be seen.
“There is a strong potential that there’s going to be a very quick escalation in the claims cost associated with that,” he said.
He says that doesn’t necessarily mean a sharp spike in premiums, as most people don’t use all the existing benefits and the industry is still competitive.
“Properly implemented, it shouldn’t have a significant increase in the claims costs for Nova Scotia drivers” he said. “No insurer is going to price themselves uncompetitively, so competition works.”
But PC leader Jamie Baillie is convinced drivers will be adversely affected.
“It’s going to cost every driver more,” he said. “It’s a mandatory product so you have to pay for it, so you’re going to have to pay more. This is another example of responding to a special interest and not the general interest.”
Government estimates suggest the chnages will cost the industry about one per cent more, or about $7 annually per customer.
