The government of Newfoundland and Labrador is amending legislation to strike a balance between stabilizing insurance rates for consumers while maintaining access to justice for victims. The legislation follows on the heels of a 166-page report from the Public Utilities Board that investigated the rising cost of automobile insurance claims.
While that review did not make formal recommendations, it reached numerous conclusions and the provincial government’s new legislation is reading between the lines. Changes to the Automobile Insurance Act and the Insurance Companies Act, which have now received royal assent, will reshape the insurance landscape in Newfoundland and Labrador. With respect to the most controversial issue — a compensation cap on minor injuries — the government has taken the safe road. No cap will be introduced, but there will be an increase in the deductible for bodily injury claims to $5,000 from $2,500.
The increase is a compromise, Service NL Minister Sherry Gambin-Walsh admitted to reporters. In meetings with lawyers and the insurers to discuss the PUB’s report, she said, “We could not find a common ground.”