News Release Archive
BUSINESS/CONSUMER SERVICES--INSURANCE AGAINST THE UNINSURED ----------------------------------------------------------------- Nova Scotians involved in a car accident with an uninsured driver now have one less thing to worry about. Effective July 1, a driver's insurance company will be required to pay the costs if the other motorist is not insured. Any necessary legal action will also be the responsibility of the insurer. "We are making it easier for an individual involved with an uninsured driver," said Business and Consumer Services Minister Sandy Jolly. "Settlement of claims should be faster, easier and less complicated." There are more than 600,000 registered vehicles in Nova Scotia. By law, each of those vehicles must be insured so that accident victims will be compensated. Unfortunately, however, not all drivers have the required insurance -- and those who do have had to pay the price for those who don't. Prior to this legislation, insured drivers had to make accident claims through the province's judgement recovery program, which was indirectly funded by drivers through premiums built into their annual insurance bill. This process, in which accident victims had to sue the uninsured driver or the Registrar of Motor Vehicles and then get the settlement approved by the Supreme Court, was not satisfactory to either the insured or the insurance industry. "We think this change is great for the insured driver because they can go directly to their own insurance company and make arrangement to get their repairs paid for," said Betty Walker, Atlantic region manager for the Insurance Bureau of Canada. "Insurance companies are all in favour of this change. They prefer to look after their own customers -- instead of sending them away when they've had the misfortune of encountering an uninsured driver." The built-in premium which funded the judgement recovery program will be replaced by an "uninsured automobile coverage" premium in each auto insurance policy. A new section has been added to policies to accommodate this new premium. The rates are filed with the Utility and Review Board. "The cost of uninsured automobile coverage ranges from $10 to $14 a year, but that doesn't mean that the consumer's insurance bill will increase by this amount," said Paul LeBlanc, superintendent of insurance at Business and Consumer Services. "It will be mostly offset by the removal of the hidden premium which has funded the now-defunct judgement recovery process." This legislation change, in itself, should not increase premiums beyond what they otherwise would be. Automobile insurance rates are affected by many variables -- primarily the cost of insurance claims. A pedestrian who is struck by an uninsured motorist can also claim against his or her own car insurance policy. If the pedestrian has no policy, claim can be made through the Facility Association which will administer an uninsured automobile fund for that purpose. The Facility Association is a group of insurers, pooling together to provide coverage for "hard to insure" risks, such as drivers unable to get usual car insurance coverage. Processing of existing claims through judgment recovery will be permitted for a two-year period beginning the day the new legislation took effect. -30- Contact: David MacNeil 902-424-2933 trp July 08, 1996 - 10:30 a.m.