Auto insurance reform passes the House of Assembly

Legislation that will result in average savings of 15 per cent on consumers� auto insurance bills passed the House of Assembly prior to the closure of the spring session.

The changes will take effect once the legislation is proclaimed in a few weeks time. Government is currently finalizing the accompanying regulations. The regulations set the amount of the deductible at $2,500 and outline the new underwriting guidelines.

"Government committed to bringing in meaningful auto insurance reform within a reasonable time period of taking office and we have done that," said Government Services Minister Dianne Whalen. "These changes preserve a person�s ability to sue for compensation for pain and suffering, while still achieving savings for the people of the province."

The reform package will result in savings of between nine and 20 per cent, depending on a person�s coverage and where in the province they live. A person who carries only third-party liability coverage will save nine per cent, while a person who carries full coverage will see significantly more savings, up to 20 per cent in some areas.

The savings will be mainly achieved through a combination of a $2,500 deductible and legislated reductions in third-party liability, comprehensive, collision and uninsured motorist coverage.

Once the law is proclaimed in a few weeks, insurance companies will need time to make the necessary adjustments to their clients� accounts. Consumers must be patient with their insurers during this time. Any adjustments will be retroactive to the proclamation date.

Consumers should be aware that while the reductions apply to everyone, only those who pay semi-annually or annually will receive a refund cheque. If less than three months remains on the policy, the amount can be credited toward the next policy. For individuals who pay monthly, the monthly payments for the remainder of the policy will be reduced rather than a cheque being issued.

Media contact: Tracy Barron, Communications, (709) 729-4860 or (709) 690-6157

2004 06 09                                        4:20 p.m.