News Release Archive

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

"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

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.


Contact: David MacNeil  902-424-2933

trp                     July 08, 1996 - 10:30 a.m.