It’s hard to say whether the province plans to put a cap on minor-injury insurance claims, but the battle between personal-injury lawyers and the insurance industry will factor heavily into the decision.
The Board of Commissioners of Public Utilities (PUB) submitted its 166-page report on the state of insurance premiums in the province to the government on Thursday.
All ServiceNL Minister Sherry Gambin-Walsh can say at this point is that the report will be examined, with a decision to come within the next month.
Gambin-Walsh says from the government’s perspective, it all comes down to the rates consumers pay for insurance.
“They are our number one priority. We plan to take the document and analyze it. We’ll bring in legal representatives and the individuals from the insurance bureau and we’re going to come together,” said Gambin-Walsh.
“We’re going to try to find a way to help the consumers of the province.”
The report notes that, on average, people in this province pay 35 per cent more for insurance than do people in the rest of Atlantic Canada.
When it comes to the question of injury caps versus the use of deductibles, introducing a cap could reduce the cost to insurance companies by 23 to 29 per cent. While that might make rates more stable, the report says it is “unlikely to result in rate decreases for consumers, in the absence of additional reform measures.”
Steve Marshall, a partner with Roebothan McKay Marshall, says what’s good for the insurance industry might not be good for the people.
“The insurance industry themselves had to admit, and the PUB just reconfirmed this, that a cap on your rights for proper compensation will not reduce your insurance premiums,” said Marshall.
“All it will do is save the insurance companies money at your expense.”
In a news release, Insurance Bureau of Canada vice-president Atlantic Amanda Dean says whatever the measure taken, something has to be done to decrease the overall cost.
“Every day, the people of this province are telling our industry about the effect that the cost of auto insurance has on their household income,” said Dean.
“We need claims cost controls in place, based on the evidence in the PUB report, to protect everyone who pays for an auto insurance policy. This means changing the current auto insurance system.”
While Dean doesn’t contest that a cap will not decrease consumer costs, she says it will not restrict anyone’s right to justice.
“A minor-injury cap would not take away the rights of people to sue if they are legitimately injured and require additional care. In fact, reforms to the system would provide quicker access to rehabilitative care,” Dean stated in the release.
In its conclusion, the report notes the benefits and detriments of replacing the existing $2,500 deductible with a cap.
“A monetary cap on pain-and-suffering awards presents the best opportunity for the reduction of bodily injury claims costs but would also have significant implications for claimants,” reads the report.
“The personal stories of those affected by a motor vehicle accident and their treating medical and legal professionals provided a very compelling picture of the profound impacts a motor vehicle accident can have and the importance of fair compensation for those affected.”
Gambin-Walsh says she intends to bring forward legislation to address auto insurance costs in the spring sitting of the House of Assembly, which begins March 3.