Service NL
Justice and Public Safety
April 15, 2019

Changes to Automobile Insurance Legislation Provide Better Value for Consumers

Changes to the Automobile Insurance Act and the Insurance Companies Act will receive second reading in the House of Assembly today. The changes are intended to help stabilize insurance rates while enhancing consumer protection to benefit the people of the province.

Some of the key changes to the legislation include an increase in the deductible from $2,500 to $5,000 for bodily injury claims; introduction of treatment protocols for common injuries as the primary payer; no access to the Uninsured Automobile Fund for losses by uninsured motorists; direct compensation for property damage; requirement for insurance companies to notify the Registrar of Motor Vehicles of the cancellation or expiration of insurance policies; and changes to procedural rules for motor vehicle collision claims.

Proposed amendments will also provide a mandated insurance discount for winter tire usage, implementation of underwriting guidelines concerning the optional use of telematics, and changes to the rate setting process.

The proposed amendments can be found in the backgrounder below.

In addition, as part of Budget 2019 the Provincial Government will eliminate the remaining tax on automobile insurance. More details will be provided on Budget Day.

There are also other changes to be implemented that are part of the Provincial Government’s suite of measures to stabilize insurance rates that do not require changes to auto insurance legislation, including permitting electronic proof of auto insurance and plate-to-owner program.

The proposed amendments are the result of feedback received through the Board of Commissioners of Public Utilities’ independent review of the automobile insurance system, as well as public consultations in the spring of 2018 on government’s EngageNL website, and consultations with stakeholders such as the insurance industry, legal community, the Consumer Advocate and the taxi industry.

Recognizing that driver behaviours also play a role in helping stabilize insurance rates, the Provincial Government is committed to highway safety and continually updates the Highway Traffic Act to keep current with safety practices.

A number of recent changes to the Highway Traffic Act include enhanced move-over provisions; changes to reflect the legalization of cannabis; introduction of a one-metre rule; strengthened distracted driving rules, excessive speeding and street racing provisions; as well as penalties for stunting. Changes were also made to the Act to deter impaired driving including mandatory ignition interlocks, impoundment of vehicles and zero tolerance for novice drivers and drivers under age 22.

“Our number one priority during the automobile insurance review has always been the consumers of Newfoundland and Labrador. When we initiated the review, our goal was to identify opportunities to keep rates as low as possible and help bring stability to the industry. We recognize that we cannot provide a single quick fix for the high insurance rates in our province but, together, the amendments we have introduced today will help achieve our objective.”
Honourable Sherry Gambin-Walsh
Minister of Service NL

“The amendments strike a balance between stabilizing insurance rates for the consumer while maintaining access to justice for victims. I want to thank the Public Utilities Board for their comprehensive report that contributed greatly to the first significant review of auto insurance in almost 15 years.”
Honourable Andrew Parsons
Minister of Justice and Public Safety and Attorney General

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Learn more
Independent Review of Automobile Insurance System Complete

Provincial Government Releases Results of Public Consultations on Automobile Insurance

The Way Forward

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Media contacts
Krista Dalton
Service NL
729-4748, 685-6492

Lesley Clarke
Justice and Public Safety
709-729-6985, 699-2910


Amendments to the Automobile Insurance Act


Current Legislation

New Legislation

Diagnostic and treatment protocols

Accident victims submit claims for treatment expenses and, if applicable, the victim is required to first claim expenses under their private health insurance.

Protocols to be adopted for treatment of common injuries such as sprains, strains and whiplash so accident victims can seek treatment immediately and without prior approval of the insurer, with direct billing to the automobile insurance company. These benefits will be paid prior to accessing their private health insurance.

Direct Compensation for Property Damage (DCPD)

Motorists deal with at-fault driver’s insurance company for their property damage claims.

Motorists will deal with their own insurance company on property damage claims where they are not at fault, contributing to a faster resolution of the claim and a more consumer friendly experience.


$2,500 deductible from all pain and suffering awards.

Deductible being doubled, to $5,000.

Mandatory reporting of insurance cancellation

Only cancellation of policies for commercial vehicles, taxis, ambulances, buses and school buses are required to be reported to the Registrar of Motor Vehicles.

Insurers will be required to report a cancellation of any auto insurance policy to the Registrar of Motor Vehicles.

Procedural changes

Lengthy timelines for adjustment and settlement processes for accident victims.

· Claim adjustment and settlement process for bodily injury claims will be streamlined.

· There will be a requirement to apply for accident benefits where available.

· Notice of intention to commence an action within 120 days.

· A health provider examination may be required at insurers’ expense.

· Damages reduced by the amount of accident benefits to avoid double counting.

Rate setting process

Insurance companies face an onerous and time consuming process to change rates.

· Full filings will be required every three years.

· There will be a mechanism for quick approval of rates where changes are no more than three per cent in a given year, and no more than six per cent cumulatively over three years.

· Fleet rated risks would be outside the PUB process, allowing taxi companies and others to negotiate their rates with willing insurers.

· More publication of information by the PUB, to inform consumers.

Statutory review

No requirement in law to review auto insurance.

There will be a requirement to review auto insurance laws at least every five years.


Telematics is an option to track driver behaviour for proof of risk for insurance, but there is no provision for this in the insurance law.

An optional use of telematics will be permitted subject to ensuring customer who opt in have their privacy rights respected.

Uninsured automobile coverage

Uninsured motorists involved in an accident are still eligible for compensation from the uninsured fund.

Uninsured motorists will be prohibited from accessing the Uninsured Automobile Fund for any heads of damage.

Winter tires

Some insurers provide discounts for winter tire use.

All insurers will be required to apply a winter tire discount.

Amendments to the Insurance Companies Act


Current Legislation

New Legislation

Commission rate for taxis and limousines

Facility Association pays brokers six per cent commission rate for taxis and limousines.

Commission rate for taxis and limousines will be cut in half, to three per cent.

Risk sharing pools

No provision for risk sharing pools to provide an alternative to Facility Association for higher risk drivers.

Facility Association to develop risk sharing pools in its plan of operation.

2019 04 15                              12:35 p.m.