HALIFAX - Drivers injured in an accident will see mandatory no-fault benefits double under a series of auto insurance reforms announced Wednesday by the Nova Scotia government.
Under the changes, the benefit for medical and rehabilitation expenses would go up from $25,000 to $50,000.
Death benefits to the head of a household would jump from $10,000 to $25,000.
Graham Steele, the minister responsible for the Insurance Act, said current benefits are out of date and in need of revision.
"No-fault benefits ... is something most people don't think about until they are injured, but the rates were set in 1982 and haven't been increased since," said Steele. "That is something that people when they are injured will appreciate."
Another change would give drivers the choice of buying additional coverage for minor injuries that would give them the right to sue — something known as the "full tort" option.
The government said pricing and the feasibility of full tort was still to be assessed by the Nova Scotia Utility and Review Board.
Steele said he hoped the changes would not result in a significant increase in premiums, but added it would take time to see how various insurance companies react.
He said the government will be telling insurers that increases will not be permitted for the first year the changes take effect.
"Let's get a year's experience under our belt so that we know what your (insurers) actual costs are under these reforms and then if an increase in premium is necessary you can apply for it," said Steele.
The minister pointed out that the Utility and Review Board has said making the changes could cost the average driver up to $7.50 more per year in premiums.
An industry spokesman said he was supportive of the changes proposed by the government.
"I think generally speaking the body of the reforms ... are very positive for Nova Scotia drivers," said Bill Adams, Atlantic vice-president for the Insurance Bureau of Canada.
However, Adams cautioned it remained to be seen whether the changes would have unintended consequences sometime in the future.
"When you look at the potential of doubling the benefits available to Nova Scotians, there is a strong potential that there is going to be a very quick escalation in the claims costs associated with that," said Adams.
Adams said insurers wouldn't necessarily respond to a one-time shift in claims costs, but if they occur year over year, "you're going to see premiums increase."
Liberal insurance critic Diana Whalen said many of the individual changes are positive for consumers, but she said her main concern would be affordability.
"The thing to be watching for is what is the impact on premiums and will there be a lot of upward pressure because that creates instability and that's what we are going to be worried about," Whalen said.
Under other changes, insurance companies would no longer be permitted to penalize a driver who has paid collision damages out of his own pocket in order to encourage more timely reporting of such accidents.
There will also be an opportunity for direct compensation for property damage from a driver's own insurance company in instances where another driver is at fault.
The province will also introduce diagnostic and treatment protocols for minor injuries, including strains, sprains, and certain types of whiplash.
And in an attempt to assist volunteer fire departments in dealing with the costs of responding to highway collisions, insurers will be required to pay an annual levy of 50 cents per insured vehicle. The funds are to be distributed among small rural fire departments.
A final change would require auto insurance legislation and regulations to be reviewed at least every seven years.
The reforms largely follow the recommendations of a consultant's report released in June that reviewed the province's auto insurance system.
Steele said the first phase of the changes will be introduced April 1, followed by a second phase a year later.
He said he believes the reforms will enhance a system that works, although he didn't rule out consideration of a public auto insurance option should a crisis hit the industry similar to the one experienced in 2003 when insurance rates skyrocketed.
"We don't see that (problem) in the existing environment and we don't see that on the horizon, so it's not an issue that we have any interest in pursuing in the current environment."