NL’s auto insurance reforms ignore cap on minor injury claims

Published: April 24, 2019

Updated: June 3, 2019

Author: Luke Jones



Newfoundland and Labrador has proposed new auto insurance reforms that aim to slow down growing premium rates. However, a cap on minor injuries which is wanted by the private insurance industry is not among the changes implemented by the NL government.

While other Canadian provinces have opted for a cap on minor injuries, Newfoundland and Labrador is going a different route. The government has instead put forward a proposal for raising its existing deductible on bodily injury claims from $2,500 to $5,000.

The Insurance Bureau of Canada (IBC), the private insurance industry representatives, has repeatedly called for NL to introduce a cap on minor injuries. The deductible system seems to not be working as the province has an average auto insurance rate over 30% higher than the other Maritime provinces.

“We could not find a common ground,” Service NL Minister Sherry Gambin-Walsh said about the cap. “There was no consensus among the public or the stakeholders on this matter.”

When debating the introduction of a cap, the IBC pointed out deductibles for personal injury will not reduce auto insurance premiums unless the deductible is excessively high. Indeed, even if the deductible was set at $10,000, average savings would only amount to $65 each year on the average premium.

Other proposals made by the NL government to reform the province’s auto insurance system include:

• New treatment protocols for common injuries
• Uninsured motorists being denied access to the Uninsured Automobile Fund if they caused the loss
• Insurance companies must tell the Registrar of Motor Vehicles when a policy expires or is cancelled
• Direct compensation payments for property damage
• Updated procedures for collision claims
• Mandatory discounts for winter tire use
• New underwriting guidelines for the use of telematics

“When we initiated the [auto insurance] review, our goal was to identify opportunities to keep rates as low as possible and help bring stability to the industry,” Gambin-Walsh said in a statement. “We recognize that we cannot provide a single quick fix for the high insurance rates in our province but, together, the amendments we have introduced today will help achieve our objective.”