On Monday, April 15, 2019, the Newfoundland and Labrador legislature passed a number of changes to the Automobile Insurance Act ("Act") stating that the intent is to help stabilize insurance rates, enhance consumer protection and maintain access to justice for victims of motor vehicle accidents. The amendments make reference to the "regulations", but at this stage companion regulations have not been released.
The Government rejected a proposed cap on claims for pain and suffering, electing instead to increase the deductible for all bodily injury claims from $2,500 to $5,000.
While Section B coverage is still optional, the Act now makes it mandatory for an insured with Section B coverage to apply for accident benefits following an accident. In effect, Section B now becomes primary insurance while other private insurance coverage becomes excess insurance. The Act now expressly provides that accident benefits received by a plaintiff, or to which the plaintiff remains entitled, are deductible from a damage award.
The Act also introduces standardized protocols for treatment of common injuries such as sprains, strains and whiplash so accident victims can seek immediate treatment, without prior approval of the insurer.
The Act also attempts to streamline the adjustment and settlement processes for bodily injury claims. Features of the new process include:
- a requirement that claimants file a notice of intention to commence an action against the insured within 120 days of the accident, with pre-judgment interest being calculated from the date of the giving of the notice;
- an obligation that the insured served with a notice of intention to inform their insurer within five days of receipt of the notice;
- a requirement that certain information and documentation be provided to the insurer in the time prescribed by the regulations;
- the filing of a statutory declaration describing the accident and the nature of the claim;
- the right of an insurer, at the insurer's expense, to have the plaintiff examined by a health care provider identified in the regulations which examination "shall not be unnecessarily repetitious and shall not involve a procedure that is unreasonable or dangerous";
- mandatory participation in a case management process prescribed by the regulations.
Property damage claims, formerly managed through the at-fault driver's insurance company, will be dealt with through the motorist's own insurance company. Where two or more insured vehicles are involved in an accident, each insured is entitled to be paid for property damage directly from the insured's own insurer, based on the degree of fault as determined by the fault determination rules that will be prescribed in the regulations. An insured may challenge the fault determination by way of court application if the insured feels it does not accurately reflect the degree of fault.
The above noted amendments, excepting the provisions regarding standardized protocols, come into force on January 1, 2020 and apply only to injuries or damage sustained on or after that date. The amendments respecting standardized protocols will come into effect on a date to be proclaimed by the Lieutenant Governor in Council.
Amendments to the Act now preclude the owner and driver of an uninsured automobile from seeking compensation from the Uninsured Automobile Fund for loss or damage arising out of the operation, care or control of the uninsured automobile. This provision comes into force on August 1, 2019 and applies only to injuries or damage sustained on or after that date.
The legislation also contains non-claims related amendments, including a requirement to offer discounts for winter tire use, a more simplified process for seeking rate adjustments and the voluntary use of telematics to track driver behavior.
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