Monday, May 11, 2009
Nova Scotia Insurance Cap

In 2003 the Conservative government of Nova Scotia passed legislation which imposed a cap of $2500 on "general damage" awards in motor vehicle collision personal injury claims, settlements and lawsuit. The legislation impacts victims of car accidents whose injuries are deemed to be "minor". While there are some other provinces with cap legislation, Nova Scotia's limit is the lowest in the country. Further compounding the unfairness of this legislation, the Tory government chose to define "minor injury" in as broad a manner possible. The all-encompassing definition potentially leaves little recourse for those car accident victims who are forced to live with permanent injury. Insurance companies now routinely argue that victims of chronic pain fall under the cap legislation. Legislation similar to that in Nova Scotia has been found to be unconstitutional in Alberta for discriminating against people with chronic pain.

The stated goal of reducing insurance rates has not been realized. Able to limit the recovery of sufferers of chronic pain, insurance companies have seen record profits since the imposition of the cap. These profits have remained in the pockets of the insurance companies, who have chosen not to pass the profits down to insurance consumers. Interestingly, a recent study has revealed that insurance consumers living in provinces without cap legislation, such as Newfoundland, enjoy the lowest insurance premiums in the country. The study can be found here.

For the past six years, insurance consumers who have had the misfortune of falling victim to car accidents have seen their recovery limited. However there is reason to be optimistic for change. A public interest group called the Nova Scotia Coalition Against No-Fault Insurance Society has been helping pain sufferers who have fallen victim to this legislation. The group has been working at finding an alternative for the cap legislation. A challenge to the constitutional validity of the legislation is currently making its way through the Nova Scotia courts. Furthermore, a provincial general election has been called for June 9, 2009. We encourage all Nova Scotia residents and insurance consumers to inform themselves of the positions of the various parties as they relate to the insurance cap.

Read about the NDP's position on the cap as it appeared in the Saturday, May 9, 2009 edition of the Herald.