Challenging New Brunswick's auto insurance cap: Myth versus fact

    FREDERICTON, April 20 /CNW/ - New Brunswick's personal injury lawyers
organized a news conference this morning taking aim at the province's cap on
pain and suffering awards for minor injuries resulting from auto collisions.
Insurance Bureau of Canada (IBC) would like to clarify some misconceptions
surrounding the minor injury cap, which is currently the subject of a court
    Court challenges to minor injury caps were recently heard in both Alberta
and Nova Scotia. Despite rendering opposite final decisions, the judges in
both provinces rejected the personal injury lawyers' argument that bodily
injury costs were not responsible for the spike in premium levels that
occurred, and that insurance companies had purposely misled the government. In
2003, the Nova Scotia Utility and Review Board found that increasing premiums
were directly caused by rising claims costs for minor, non-permanent injuries.
    Despite these unbiased findings, these false arguments are being advanced
yet again in New Brunswick.
    New Brunswick's minor injury cap was introduced as part of the
government's 2003 auto reforms as a necessary and reasonable limit on the
right to sue. Prior to the implementation of the cap, court awards for minor
injuries had spiraled out of control and were creating a highly litigious
environment. Consequently, claims costs increased dramatically and the
premiums required to pay these costs followed suit.
    "The auto insurance system must strike a balance between providing robust
benefits for the people who make claims and affordable premiums for everyone
who drives," said Bill Adams, Vice-President, Atlantic, IBC. "As a result of
the implementation of the minor injury cap in New Brunswick, auto insurance
premiums have decreased by 35.9% since 2004. According to the New Brunswick
Insurance Board, rates have come down for five straight years, and the average
premium in the province is now $754. This places New Brunswick amongst the
lowest in Canada."
    New Brunswickers continue to enjoy generous accident benefits and the
right to sue at-fault drivers for their economic losses. Simply put:

    -   The cap does not apply to the compensation victims receive from
        their own insurer to heal from their injuries, including lost wages.
    -   It does not apply to court awards for medical and/or other economic
        losses that victims may recover in court when suing an at-fault
        driver - even if the injury is classified as minor.
    -   It does not apply to the pain and suffering awards victims with
        non-minor injuries may recover from the at-fault driver.

    "Insurers are in the business of settling claims and helping people
recover from their injuries," added Adams. "The auto insurance system is
currently working well in this province and New Brunswickers are happy with
    Evidence of this can be seen in the Annual Reports from the NB Consumer
Advocate for Insurance. Calls pertaining to auto insurance have declined from
1,514 in 2006 to just 837 in 2008. That's a drop of 44.7%.
    Auto collision victims who are not happy with how their claims are
settled have several options available to them for recourse, including ombud
services, regulatory complaint mechanisms and legal action.

    Insurance Bureau of Canada is the national industry association
representing Canada's private home, car and business insurers. Its member
companies represent nearly 95% of the property and casualty (P&C) insurance
market in Canada. The P&C insurance industry employs over 110,000 Canadians,
pays more than $6 billion in taxes to the federal, provincial and municipal
governments, and has a total premium base of $38 billion.
    To view news releases and information, visit the media section of IBC's
website at

For further information:

For further information: or to arrange an interview, please contact:
James Geuzebroek, (416) 362-2031 ext. 4364

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