New Brunswick’s higher cap for minor auto collision injuries to take effect July 1

The New Brunswick government has announced that the raised damages cap for people suffering minor personal injuries from auto collisions will take effect this summer.

The new raised cap of $7,500 (up from $2,500) will take effect on July 1, the province’s Justice Minister and Attorney General Marie-Claude Blais announced in the legislative assembly Wednesday.

Beginning Jan. 1, 2015 the maximum amount will also increase in accordance with the Consumer Price Index for New Brunswick.

Along with those changes, the definition of “minor personal injury” has also been updated in the province’s Insurance Act

In a statement Thursday, the Insurance Bureau of Canada said the industry is committed to working with the provincial government on implementing the changes.

“IBC will work with the government and the insurance industry to ensure smooth implementation of the changes to the minor injury damages cap for New Brunswickers,” its statement said.

“A sustainable and stable auto insurance system must strike a balance between providing adequate benefits for the few people who make claims and affordable premiums for everyone who drives,” Steve Olmstead, manager of government relations with IBC, commented in the statement.

“The government’s decision to increase the minor injury cap changes that balance to provide more benefits that we hope will serve to benefit New Brunswick drivers,” he added. “We know that caps can work, and that caps are a fair and reasonable way to control claims costs and deliver affordable premiums for consumers.”

The previous $2,500 cap was created in 2003. In 2011, an Auto Insurance Working Group was formed to address the cap on personal injury awards, and in November of that year, the group released its final report. Its recommendations included proposed changes to the minor personal injury definition and increasing the personal injury award cap to between $4,000 and $6,000.

In June 2012, the provincial government tabled its own recommendations based on the working group’s report. It proposed increasing the cap to $7,500, more than the working group’s proposal, but on par with the cap in Nova Scotia.

The government also asked for public and stakeholder feedback on the amendments following its proposed changes in June 2012, and again earlier this year.