N.B. proposes minor injury award cap increase

Thompson's World Insurance News

Insurers and brokers are taking a wait-and-see approach to proposed

enhancements to New Brunswick's auto insurance system that could take effect

as early as this fall.

The provincial government has recommended among other things that the

cap on awards for minor auto accident injuries be increased to $7,500 from

$2,500, raising the New Brunswick level to that of neighbouring Nova Scotia.

The proposals stem from work conducted by the province's auto insurance

working group that began in January, 2011.

“Our recommendation of a $7,500 cap exceeds the working group's

suggested cap,” Justice Minister and Attorney General Marie-Claude Blais

said.

“Actuaries have told us that any increase in the required average

premium with the proposed definition, together with an increase in the cap

amount, could be absorbed by insurers – resulting in no increase in the

average premiums.

“This would allow us to foster a market in which auto insurance remains

affordable and accessible in a stable environment.”

The Insurance Bureau of Canada's Atlantic vp Bill Adams said that

overall it believes the government has taken a reasoned approach that

focuses on stability, affordability and availability for auto insurance in

New Brunswick.

“While it is clear that the announced reforms will push up claims costs,

it will be important to monitor the impact of those pressures over time.”

Mr. Adams said the fact that the working group recommendations went

beyond the official mandate bodes well for other improvements to the

province's auto insurance system, including a focus on consumer awareness, a

discussion on the potential of minor injury diagnostic and treatment

protocols and regular monitoring of how auto insurance is working for New

Brunswickers.

The Insurance Brokers Association of New Brunswick said the proposed

increase in the cap is important. At the auto insurance working group

hearings, insurance brokers spoke in favor of improvements that would

increase awards and maintain stable rates for consumers,” said IBANB

president Terry Gaudet of Beausejour Gaudet Insurance in Dieppe.

“Not only is the new $7,500 cap better for the consumers but it being

indexed to the cost of living is an incredible way to ensure that it keeps

up with the times.”

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