How Intact changed its approach to minor driving convictions in Nova Scotia

For Intact clients in Nova Scotia, the difference in premiums paid by drivers with a conviction-free discount and those with a minor conviction or two is about to increase.

In addition, the company will be removing some automatic emergency braking discounts in the province.

As it currently stands, Intact’s auto clients in Nova Scotia with one or two minor convictions in the past three years have to pay 25% more than drivers with a conviction-free discount.  That increase will now become 40%, effective April 8 for new business and May 8 for renewal business, wrote Peter Gurnham, a member of the Nova Scotia Utility and Review Board, in a ruling released Tuesday.

“While this 40% level may seem high, when compared to other insurers the Intact premium increase for the first minor conviction is not the highest [in Nova Scotia],” wrote Gurnham.

Tuesday’s ruling was on rate filings Intact made with the Nova Scotia regulator for Intact Insurance Company, Trafalgar Insurance Company of Canada, and Novex Insurance Company.

As a result of the board’s ruling, Intact’s rate for its overall book of business will go up 2.6%. The increases are 2.5% for Novex and 1.7% for Trafalgar.

The premium increase for traffic convictions gets higher as the number of convictions increase. Intact decided its differential was not high enough – compared to the rest of the Nova Scotia auto insurance industry – for clients with one or two minor convictions.

Insurers generally categorize convictions as minor, major, and criminal and it can vary by insurer and jurisdiction. Examples of minor convictions in Ontario could include failing to signal, improper driving in a bus lane, or prohibited turn, reports Hub. Examples of major convictions would include failing to stop, improper passing of a school bus, producing false evidence of a license or insurance, or a violation of license conditions.

In Nova Scotia, the regulator approved Intact’s application to remove the automatic emergency braking discount of 10% for collision and the collision portion of all perils. Intact will keep the discount for bodily injury and accident benefits.

“Since the introduction of the discount, Intact observed that other competitors removed similar discounts from physical damage coverages,” the Nova Scotia regulator noted in its report. “These companies determined that while the existence of an automatic emergency braking system makes it safer to drive, the cost to repair vehicles with this feature that are damaged in an accident is more expensive.”