06/28/2012 10:47 EDT | Updated 08/28/2012 05:12 EDT

N.B. government to seek more input on proposed changes to automobile insurance

FREDERICTON - The New Brunswick government is recommending an increase in the cap on automobile insurance payments for minor injuries, but is sending the issue out for more consultation before making any changes.

Last November, a government-appointed working group recommended changing the definition of minor injury, and an increase of the cap for compensation to between $4,000 and $6,000 from the existing $2,500.

Opponents of the cap have complained it is too low, and too many injuries — including broken bones — are being labelled as minor.

On Thursday, Justice Minister Marie Claude Blais announced that the provincial government is suggesting a cap of $7,500 — the same as the cap set by neighbouring Nova Scotia in 2010.

However, Blais said the working group's definition of minor injury was too vague, and the government is suggesting one that includes a list of specific injuries. It includes such things as lacerations, sprains, strains, whiplash, and the fracture of a non-weight-bearing bone.

Blais said she wants input from the insurance industry and the public in an effort to avoid any significant increase in premiums.

"This will be new to the insurance companies, the lawyers, the victims, and the public in general," she said. "That's why we want to take the time to get the response from those various stakeholders."

Blais said it was important to change both the definition and the cap to avoid significant upward pressure on premiums.

"I think when insurance companies look at our report and look at the balancing act that we did between the definition and the cap, there are ways we can move forward in this province and continue to have very low insurance premiums."

But Bill Adams, Atlantic vice-president of the Insurance Bureau of Canada, said he expects there will be some pressure to increase premiums.

"Any time you raise a minor injury cap from $2,500 to $7,500, it's a tripling of the minor injury cap, and there's no question it is going to add to claims costs," he said.

Adams said it could take two or three years before insurance companies know the actual impact.

The industry still doesn't know the impact of the same cap change in Nova Scotia in April 2010, he said.

Adams said he likes New Brunswick's approach to defining specific minor injuries and he believes the two changes together would not result in a significant increase in rates.

Automobile insurance rates in New Brunswick decreased last year, marking the seventh year in a row they have gone down.

The working group also recommended that the Superintendent of Insurance adopt a protocol to make funds available to allow accident victims early access to treatment.

Blais said the government needs to do more study before responding to that issue.

She is not setting any deadline for making a final decision on the proposed insurance changes.

"Some of our response is different from what was suggested by the auto insurance working group and we want to have time for people to react," Blais said.