Insurance companies in N.S. could see 17% increase in claims costs after change to minor injury cap

Recent amendments to Nova Scotia’s minor injury cap and definition will increase average bodily injury claims costs by 17%, Oliver, Wyman Limited estimates.
The Nova Scotia government announced amendments to the Insurance Act and draft regulations on Apr. 28, 2010. The amendments triple the minor injury cap’s maximum limit to $7,500.
Oliver Wyman estimates the required average premium for 2010 will increase by $24 to approximately $723 because of the changes to the Minor Injury Regulation (MIR).
Nova Scotia’s superintendent of insurance contracted Oliver Wyman to provide a cost estimate in regards to the changes to the MIR.
If all open claims as of July 1, 2010 were to be settled based on the new minor injury cap and definition, insurers will pay approximately $7 million in additional claims costs, Oliver Wyman suggested.
If all open or closed claims subject to the current cap and definition were to be retroactively paid – which the province has said won’t be the case – insurers would pay an additional $69 million in claims costs.
The firm noted that both estimated figures would be higher if a large number of those recently injured in an automobile accident waited for the government’s review of the definition and cap before proceeding with their respective claims.