IBC continues to back N.L. minor injury cap despite opposition repeal threat

Published: October 20, 2018

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The Public Utilities Board (PUB) in Newfoundland and Labrador (N.L.) is finalizing its review into the flawed auto insurance system in the province. Among the biggest debate points is the potential introduction of a minor injury compensation cap for auto collisions. Today, the Insurance Bureau of Canada (IBC) has continued its support for the cap.

In an open letter to The Telegram, Amanda Dean, IBC Vice President of the Atlantic Region, defended the cap. The letter was published after N.L. Opposition leader Ches Crosbie said he would repeal any minor injury cap if his Progressive Conservatives win power in the election next year.

“I am serving due notice that if I get the opportunity to form a government, a PC government, and there’s going to be a general election next year, I’m going to repeal whatever interference with people’s rights the Ball Liberal government performs,” Crosbie said.

“There’s no reason to be interfering with the right to compensation as determined in hundreds of court decisions, maybe thousands of court decisions, over many decades across the country. Those rights have been established by the courts considering everybody’s individual circumstances and the needs of society. Leave it alone.”

Misunderstood

Dean admits the minor injury compensation cap is a controversial subject. However, she says the media has perpetuated a negativity around the solution by publishing incorrect figures. Dean explains how the cap would still give customers the rights Crosbie suggests they will lose:

“The cap applies only to those who suffer minor injuries. These injuries — which include strains, sprains and whiplash — typically resolve within days, weeks or months. The cap will not apply to more serious injuries.

“You still have the right to sue. The cap does not take away the right of an injured person to sue the at-fault driver.

“The $5,000 cap is for pain and suffering damages. This is what courts award over and above any wages that an injured person may lose through being unable to work, and over and above the cost of any required treatment.”

Neccesary Solution

Small injuries are a major burden on auto insurance companies. In many cases, a provider must pay to repair the vehicle and potentially tens of thousands of dollars to the injured party. While this payout is justified in many cases, smaller injuries may not warrant such an amount, especially if the injury heals quickly.

Dean suggests it is these small injury claims that have helped N.L. auto insurance premiums to increase. The province has an average car insurance cost of $1,100, around $300 more than other Maritime provinces. A broken system needs a solution and Dean along with the IBC believes a compensation cap is essential:

“Without this cap, N.L.’s claims costs can be expected to continue to spiral upward. In 2011, the average tort claim cost in N.L. was around $55,000. By 2017, this had risen to a whopping $79,000. Without a cap, what will N.L.’s claims costs be in 2020? And by how much will those costs increase the cost of your car insurance?”