Auto Insurance Rate Relief, Protection Coming Nov. 1

ENVIRONMENT/LABOUR--Auto Insurance Rate Relief, Protection Coming Nov. 1

Drivers in Nova Scotia will receive auto insurance rate relief and increased protection because of new legislation passed by the provincial government. The legislation comes into effect on Nov. 1.

Only accidents that occur on or after Nov. 1, 2003 will be subject to the $2,500 cap on pain and suffering awards for minor injuries.

"By the end of this week, Nova Scotians will begin benefiting from the strongest auto insurance legislation in this country," said Ron Russell, Minister responsible for the Insurance Act. "Nova Scotians will experience lower auto insurance rates and more protection because of the changes that have been made to the insurance system -- changes that drivers wanted."

In addition to rolling back rates by 20 per cent, some other reforms include:

• protection against unfair risk classification;
• creation of the Nova Scotia Insurance Review Board to review and approve all future rate and rule applications;
• the addition of Facility Association consumers in the 20 per cent reductions;
• stricter penalties for dangerous drivers;
• a requirement to show proof of insurance to register a vehicle;
• stable rates until Nov. 1, 2004, and any increases after that will be subject to board approval;
• the option to purchase enhanced accident benefits (Section B coverage).

The 20 per cent reduction will be applied to the last rate filed by insurance companies before May 1, 2003. After that time rate increases were prohibited. The lower rate is achieved by changing the insurance package for all Nova Scotia drivers. The change limits excessive compensation for pain and suffering awards for minor injuries by implementing a cap of $2,500. Limiting claims in the case of minor injuries is an important factor in containing costs in the long term.

"The 20 per cent reduction is to be applied to, or credited to, consumers by Jan. 31, 2004, in order to give insurance companies time to administer the change," said Mr. Russell. "However, many insurance companies will probably be in contact with consumers well before that date. If you have questions about your reduction, please contact your insurance company."

All other benefits remain the same as they are now, with the exception of minimum liability protection which will rise to $500,000 from $200,000.

"This legislation will benefit consumers by making auto insurance more affordable and more fair," said the minister. "It gives consumers better protection. It gives consumers the power to make new choices."

The minister said that, with such a personalized product as insurance, there will be different degrees of impact felt by consumers. In particular, consumers who have changed their driving situation in the last year by buying a new vehicle, introducing a new driver, or being involved in an at-fault accident, may see changes in their rate. But, he said, the 20 per cent decrease must still be applied on the new rate.

Government has been dealing with the issue of rising auto insurance premiums since February 2002, when it directed the Nova Scotia Utility and Review Board to conduct a rate review. In the months that followed, government hired a consumer advocate, developed education guides for consumers, held a public consultation and introduced laws to freeze rates and prevent unfair discrimination. It also conducted consultations, research, and analysis that would allow it to develop an appropriate solution for reforming auto insurance in Nova Scotia.

For more information on the new legislation and regulations visit the Web site at www.gov.ns.ca and click on the link for auto insurance, or call 424-5851 in Halifax and toll-free 1-800-898- 7668 throughout the province.