23% drop in auto insurance premiums since Nova Scotia auto cap introduced in 2003: IBC

Nova Scotia’s $2,500 cap on minor auto injuries has led to an average auto insurance premium reduction of 23% between the time the cap was implemented in 2003 and August 2009, the Insurance Bureau of Canada (IBC) says in a submission to the government.
The IBC’s submission is part of the Province of Nova Scotia’s review of the cap legislation. (The deadline for submissions was Feb. 15.)
The NDP government has vowed to review the cap as part of its mandate. Nova Scotia Premier Darrell Dexter said on the campaign trail in 2009 that he was in favour of scrapping the cap in favour of a deductible.
“As the government embarks on its review of the cap and considers alternatives for improving the auto insurance system, we believe that it is aware of the risk that eliminating or undertaking major changes to the cap on pain and suffering awards for minor injuries could jeopardize the current rate stability, affordability and availability of auto insurance for drivers in Nova Scotia,” IBC says in its submission.
IBC’s submission reviews four potential alternatives to the cap, although it does not take a position on any one of them.
The IBC reviews the following four alternatives:
•    Increase the cap amount and index it to inflation.
•    Add to the list of exceptions to the cap. (For example, injuries to internal organs; concussions with a confirmed loss of consciousness lasting one or more hours in duration; or fractures to legs/feet and the dominant arm/hand.)
•    Move to a “first party” or “pure no fault” system. (“From the perspectives of market stability and premium affordability, the Ontario experience [with no-fault] has not been positive, as medical rehabilitation costs have proved difficult to contain and the system is characterized by extreme litigiousness,” the IBC submission says.)
•    Introduce a deductible to replace the cap.
As for the deductible, the IBC submission says “a warning comes from the
Ontario system, which in 1996 sought to control rising bodily injury costs by imposing a hefty deductible of $15,000 on non-pecuniary awards.
“Instead of producing cost containment, this deductible did not prevent bodily injury costs per vehicle from rising 165% between 1996 and 2002 (after which the deductible was doubled to $30,000 and a regulation further constraining access to non-pecuniary tort awards was introduced).”