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Nova Scotia auto insurance review interim report recommends doubling standard auto accident benefits package, with ‘buy down’ option


May 4, 2011   by Canadian Underwriter


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Nova Scotia’s auto insurance review is recommending that the province raise its standard auto insurance accident benefits package from its current level of $25,000 to $50,000, and then including a provision to allow policyholders to ‘buy down’ to a basic package equal to existing Section B benefits ($25,000).
In addition, CFN Consultants (Atlantic) Inc., which is conducting a review of the province’s auto product, is suggesting the province consider the regional customization of Alberta’s minor injury protocols for use in Nova Scotia.
CFN Consultants has also recommended the province develop and price an optional tort product, which, if purchased, would mean the insured would not be subject to the province’s $7,500 cap for payments related to soft tissue injuries, and could sue for pain and suffering.
These and other recommendations are part of the Interim Report Addressing the Nova Scotia Automobile Insurance Review. The full report can be viewed at:
http://www.gov.ns.ca/autoinsurancereview/NS_Auto_Insurance_Review_Interim_Report.pdf
The interim report was prepared by Ron L’Esperance, a former provincial deputy minister, who was appointed by the government to undertake the review. The industry has until May 17 to prepare submissions in response to the 60-page interim report.
Among its many conclusions, the report found the province’s Section B [Accident] Benefits, which includes medical rehabilitation benefits, “are broadly considered to be too low and Nova Scotia is, for the most part, significantly out of step with the rest of the country in respect to the level of these benefits.”
The current mandatory level for these benefits is $25,000.
The report recommends raising these benefits up to the level of an SEF 48 endorsement, which, for additional premium, offers limits of $50,000. Consumers would then be given the option to “buy down” to the lower standard package, thus reducing their premiums.
The report also observes that under the current system, insureds may find themselves exhausting their personal health benefits before accessing their Section B benefits. The review also heard comments asking for more clarity around what to do in case of an emergency and what treatment protocols should be followed in case of an auto accident.
“Most, if not all, of these challenges can be addressed through a customized, made-in-Nova-Scotia version of the diagnostic and treatment protocols established in Alberta in 2004 and adopted, in part, in Ontario’s reforms in 2010,” the report notes.
Yet another recommendation includes developing an optional tort product to be purchased as an endorsement to an existing policy.
“In the automobile insurance reforms of 2003 undertaken in Nova Scotia, some stakeholders felt that removal of the right to sue for pain and suffering had the impact of unfairly limiting their options and choice,” the report notes. “Enabling consumers to purchase a full tort option would serve to restore that choice factor, the importance of which is a strongly held view of some consumers.
“Recognizing that this ‘choice’ will inevitably carry a higher premium, it will be important that the product is priced so that there is no likelihood that it will be cross-subsidized by the non-tort product.”


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