Communications New Brunswick
Legislative Assembly
Select Committee on Public Automobile Insurance

Overview of the Model

The made-in-New Brunswick model (see Table 1) is a no-fault public automobile insurance system. Under the no-fault model, all New Brunswickers injured in traffic accidents will be entitled to full medical and rehabilitation treatment, income replacement and other benefits depending on the severity of their injuries.

Financial compensation for pain and suffering is eliminated under the model. Individuals no longer sue to get benefits.

Fault is determined for every traffic accident. At-fault drivers pay higher premiums under the model.

Under the made-in-New Brunswick model, injured people are compensated for the following:

  • Lost income

  • Medical costs that are not usually covered by New Brunswick’s health services, such as physiotherapy, chiropractic treatments, medication, prosthetics

  • Rehabilitation expenses to help injured people to return as close as possible to the pre-accident condition.These include physical and occupational therapy and employment retraining

  • Personal care expenses to cover costs of paying helpers to provide the injured with personal care, housekeeping, shopping and such essential services.These benefits can continue throughout the injured person’s life

  • Death, funeral benefits and grief counseling for spouses, common-law partners and dependents

  • Special expenses that include compensation for a person whose main occupation at the time of the injury was taking care of others without pay; who was working full time while caring for someone under the age of 16 or not employable; or who was working without pay in a family business.The benefit provides funds to hire someone to do the work the injured person can no longer do and includes travel expenses for medical purposes

  • Students are compensated for each term of the school year they can’t complete because of injury in an accident

  • Permanent impairment is a lump sum paid to an injured person (in addition to lifelong benefits described above) who has permanently reduced body function from an accident, such as paraplegia.

In the proposed model, vehicle registration and mandatory insurance are purchased together from licenced private insurance brokers and agents in New Brunswick. Under the New Brunswick public automobile insurance model (hereinafter referred to as NBPI), licence plates must be returned when insurance is cancelled.

Mandatory insurance will include a no-fault, also known as personal injury protection, plan and $200,000 third-party liability coverage to cover damage to the property of New Brunswickers inadvertently affected by an accident.

Optional insurance for vehicle damage (collision, theft and comprehensive) will be similar to coverages sold now; consumers will decide if they wish to purchase optional coverage, including the specific kind of coverage and deductible level for their individual vehicles.

To reduce premiums and ensure that coverage is universally available, all consumers will purchase both mandatory and optional vehicle damage coverage exclusively from NBPI through their licenced community brokers and agents. New Brunswick consumers will have the choice of buying additional third-party liability coverage (more than the mandatory $200,000) and higher income replacement benefits from a private insurance company or NBPI.

Drivers’ licences will be processed through Service New Brunswick as they are now. Under the proposed model, fees for drivers’ licences are unchanged.

New Brunswick drivers with safe driving records will receive discounts on their vehicle insurance.

New Brunswick drivers whose bad driving record puts them in the penalty zone will also be charged an additional premium fee whether they own a vehicle or not.The amount will vary depending on their relative positions on the safe driving discount scale (see Figure 2).

Insurance rates will be based on a New Brunswicker’s individual driving record, vehicle usage, vehicle make/model and optional coverage purchased. Age, gender and marital status are prohibited rating factors.

The Committee decided to use a single rating territory for the entire province for the introduction of the new plan; there is no variation in rates because of where you live.The Committee recommends that after five years, the NBPI claims experience be reviewed to see if it is appropriate to maintain a
single territory.

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Legislative Assembly of New Brunswick
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