Minor injury cap could complicate auto insurance market in NL

Published: April 26, 2018

Updated: July 24, 2018

Author: Luke Jones



Newfoundland and Labrador is currently going through a comprehensive auto insurance review to help sold problems in the market and to address spiraling premium costs. One mooted reform for the province would be to cap minor injury claims. However, industry experts say such a restriction may cause more problems than it solves.

Among the other changes proposed to stabilize the NL auto insurance market in include mandatory accident benefits and pre-approved evidence-based treatment. In terms of putting a cap on minor injury claims, Natalie Higgins, Intel Financial’s vice-president of corporate development and head of Atlantic Canada said a cap of $5,000 would bring help to the market.

“One of the challenges is that we see delays in claims coming forward up to two years at times, before we have a chance to treat an individual for their injuries,” Higgins said. “So we want to see those types of things improve.”

However, she also pointed out that such a cap may overcomplicate the system for customers, if they end up believing they cannot sue insurers.

“There is a misconception around how a minor-injury cap actually works. All it covers is pain and suffering damages. Things like rehabilitation benefits, loss of income, wage replacement … all of that is outside of the cap,” the executive remarked. “You do not lose your right to sue if we have a cap.”

Higgins referenced an Insurance Bureau of Canada (IBC) survey that showed NL residents want to keep their right to sue insurance companies.

Higgins cited a survey conducted by the Insurance Bureau of Canada that found that it was very important to NL residents that they retain the right to sue.