Nova Scotia latest to cap “pain and suffering” awards

Following the lead of New Brunswick, Nova Scotia has implemented a plan to cap “pain and suffering” awards on minor injuries that result from auto accidents.The cap means the in minor injury cases, such as whiplash, accident victims who go to court to sue for non-economic loss (i.e. “pain and suffering”) will get no more than $2,500. The announcement follows a late-June release by the government on changes to the auto insurance system where it noted such a cap would soon be implemented.Insurance Bureau of Canada (IBC) regional vice president Don Forgeron says the cap already in place in New Brunswick is showing positive results and he expects the Nova Scotia experience to be similar.”Consumers of New Brunswick are seeing rate decreases and more available insurance as a result of caps in that province.” Indeed Co-operators General Insurance Co. and The Insurance Co. of PEI have both lowered rates there, and Dominion of Canada has increased availability in the northern New Brunswick region. Co-operators also says it will lower rates in Nova Scotia in response to the decision. Nova Scotia premier John Hamm says the change should result in a 20% reduction in rates, but the IBC cannot confirm that as yet. “Our actuaries are currently studying the plan to see if the change can translate into the savings projected by the government,” says Forgeron. He adds that there are two areas about which insurers remain concerned in the province: the current freeze on rates and the new regulations introduced late last month that institute changes such as underwriting rules, and a new rate review process. The government has also introduced a new “no frills” basic auto insurance product. “While rates have been frozen, the cost of claims has notand adding regulations adds more expense to the system,” Forgeron says.