Client Update: To B or Not To B? Potential Changes to PEI Auto Insurance
Significant changes may be coming to the standard automobile policy in PEI, including increases to the accident benefits available under Section B and an increase to the so-called “cap” applicable to claims for minor personal injury.
The PEI superintendant of insurance is preparing a formal proposal to government recommending significant changes to Section B of the standard automobile insurance policy in PEI, to provide more benefits for those injured in motor vehicle accidents.
The proposal is at the preliminary stages, thus it is not yet clear which changes will be put forward. Some of the changes being considered by the superintendant are as follows:
1. Increase in No-Fault Accident Benefits
No-fault accident benefits available under the PEI standard auto policy (i.e. Section B benefits) are expected to increase, mirroring the accident benefits available in New Brunswick. If approved, this would mean significant increases to the current limits available in PEI:
| Accident Benefits | Current PEI Benefits | Current NB Benefits | Potential new PEI Benefits |
| Meical and Rehabilitation Expenses | $25,000 | $50,000 | $50,000 |
| Funeral Expenses | $1,000 | $2,500 | $2,500 |
| Death Benefits – Head of Household | $10,000 | $50,000 | $50,000 |
| Death Benefits – Spouse of Head of Household | $10,000 | $25,000 | $25,000 |
| Death Benefits – Dependent | $2,000 | $5,000 | $5,000 |
| Weekly Income | Lesser of $140/week or 80 per cent of the insured’s gross weekly income from employment – maximum of 104 weeks | Lesser of $250/week or 80 per cent of the insured’s gross weekly income from employment – maximum of 104 weeks | Lesser of $250/week or 80 per cent of the insured’s gross weekly income from employment – maximum of 104 weeks |
2. Changes to the Cap for Minor Personal Injury
The superintendent is expected to recommend that the so-called cap on non-pecuniary damages for minor personal injury increase from $2,500 to $7,500 or $8,000, bringing it in line with Nova Scotia and New Brunswick. He might also recommend that the PEI cap be indexed with the consumer price index.
Although details are still currently unavailable, changes may also be proposed to the definition of “minor personal injury”, possibly adopting the language in New Brunswick or Nova Scotia.
3. Direct Compensation for Property Damage
The superintendant is expected to propose a shift to direct compensation for property damage.
4. Introduction of Catastrophic Accident Benefits
The superintendent is also considering the adoption of catastrophic accident benefits within the automobile insurance policy, but they are not expected to form part of the superintendant’s upcoming proposal to government. These benefits would expand the coverage provided by Section B to include excess medical and rehabilitation coverage for individuals who are “catastrophically” injured in a motor vehicle accident, but are unable to recover from a third party.
What this means for you
Some or all of these amendments could be included in legislation to be passed this fall (2013). The superintendant has made it clear that there will be an opportunity for insurers to provide input after his proposal is made to government.
Archive
Burtley Francis In a statement issued on April 18, 20201, the federal government (through Innovation, Science and Economic Development Canada) signalled that certain foreign investments into Canada will now face enhanced scrutiny under the Investment…
Read MoreStephanie Stapleford and Allison Whelan,LL.M In a previous Thought Leadership piece, “Tax update – response to COVID-19” (26 March 2020), we reviewed the Federal COVID-19 Emergency Response Act and provided an update on operational changes…
Read MoreClarence Bennett, James LeMesurier, QC and Kathleen Nash On April 17, 2020, the Legislative Assembly of New Brunswick met for a quick sitting during which two new Bills were introduced and received Royal Assent within…
Read MoreBurtley G. Francis and David Slipp During this unprecedented period of social isolation and economic uncertainty brought about by the COVID-19 pandemic, businesses are rapidly re-structuring their operations and adjusting their practices in order to…
Read MoreRebecca Saturley COVID-19 hit us all like a proverbial freight train. In a short period of time we all went from business as usual to the new normal. From social distancing to mass lay-offs to…
Read More(Updated) Peter McLellan, QC and Katharine Mack In a display of bi-partisanship, on Saturday, April 11 Parliament unanimously passed the COVID-19 Emergency Response Act, No. 2 and it received Royal Assent. In addition to other…
Read MoreDaniela Bassan, QC The Federal Court recently upheld the decision of the Registrar of Trademarks in a dispute over the registration and use of the PENTASTAR word mark in Canada, in Pentastar Transport Ltd. v.…
Read MoreRichard Jordan On April 8, 2020, the Government of Canada provided employers with further information about – and revisions to – the Canada Emergency Wage Subsidy (CEWS) program. Last week, the Government of Canada announced:…
Read MoreBusiness interruption insurance: recent decision may impact whether COVID-19 disruptions are covered
Colin D. Piercey, Joe Thorne and Sam Ward On March 25, 2020, we published an update setting out considerations for businesses impacted by the COVID-19 pandemic. In particular, whether business interruption may respond to these…
Read MoreThe current COVID-19 outbreak presents considerable challenges for all businesses, large and small alike. In recognition of these challenges, the Government of PEI has developed the COVID-19 Business Adaptation Program (the “Program”). The program applies…
Read More