News release

Province Delivers Lower Rates, More Protection for Consumers

Environment and Labour (Oct. 2000 - March 2008)

ENVIRONMENT/LABOUR--Province Delivers Lower Rates, More Protection for Consumers


Drivers in Nova Scotia will receive the auto insurance rate relief and increased protection they've been looking for with new legislation introduced today, Sept. 26, by the provincial government.

The legislation reduces auto insurance premiums by 20 per cent effective Nov. 1. The legislative reform also provides better protection, fairness and options for the consumer.

"Nova Scotians can look forward to lower auto insurance rates and more protection because of the changes we're making to the insurance system," said Ron Russell, Minister responsible for the Insurance Act. "This is strong, effective legislation that addresses the heart of the problem and affects substantial reform to the automobile insurance system."

The proposed legislation will amend five different acts and introduces three new regulations. In addition to rolling back rates by 20 per cent, some other reforms include: -- protection against unfair risk classification; -- creation of the Nova Scotia Insurance Review Board to review and approve all future rate and rule applications; -- stricter penalties for dangerous drivers; -- a requirement to show proof of insurance to register a vehicle; -- stable rates until Nov. 1, 2004 and any increases after that time subject to board approval; -- the option to purchase enhanced accident benefits (Section B coverage).

The 20 per cent reduction will be applied to the last rate filed by insurance companies before May 1, 2003. After that time rate increases were prohibited.

The lower rate is achieved by changing the insurance package for all Nova Scotia drivers. The change limits excessive compensation for pain and suffering awards for minor injuries by implementing a cap of $2,500. All other benefits remain the same as they are now, with the exception of minimum liability protection which will rise to $500,000 from $200,000. Limiting claims in the case of minor injuries is an important factor in containing costs in the long term.

"This legislation means more affordability, more accessibility, and more protection for all Nova Scotia drivers," said Mr. Russell. "After listening carefully to Nova Scotians we've developed this comprehensive approach. This is the right approach. We've given Nova Scotians exactly what they asked for -

  • a reformed system which provides them with rate relief and protection they need immediately."

The minister said that, with such a personalized product as insurance, there will be different degrees of impact felt by consumers. In particular, consumers who have changed their driving situation in the last year by buying a new vehicle, introducing a new driver, or being involved in an at fault accident, may see changes in their rate. But, he said, the 20 per cent decrease must still be applied on the new rate.

The government's new legislation will be complemented by the work being done by the Atlantic Insurance Harmonization Task Force that was formed by Atlantic Premiers at their meeting on June 18. The harmonization of insurance regulations will reduce duplication, resulting in lower costs for consumers. The Task Force Report is expected Sept. 30.

Government has been dealing with the issue of rising auto insurance premiums since February 2002, when it directed the Nova Scotia Utility and Review Board to conduct a rate review. In the months that followed, government hired a consumer advocate, developed education guides for consumers, held a public consultation and introduced laws to freeze rates and prevent unfair discrimination. It also conducted consultations, research, and analysis that would allow it to develop an appropriate solution for reforming auto insurance in Nova Scotia.

For more information on the new legislation and regulations see the Web site at, www.gov.ns.ca and click on the link for auto insurance, or call 424-5851 in Halifax and toll free 1-800-898- 7668 in Nova Scotia.


NOTE: Following is the list acts that will be amended by the auto insurance reform package:

Insurance Act Judicature Act Summary Proceedings Act Limitation of Actions Act Motor Vehicle Act

The package also introduces three new regulations:
Tort Recovery Limitation Regulations Prohibited Risk Factors Regulations Mandatory Conditions Regulations