Significant changes are coming to the standard automobile policy in Prince Edward Island ("PEI"), including increases to the accident benefits available under Section B and an increase to the so-called "cap" for minor personal injury.  In the fall 2013 sitting of the provincial legislature, the government introduced a bill that would make significant changes to PEI's accident benefits, cap and definition of "minor personal injury", with some of these changes being consistent with what has been done in Nova Scotia and others being consistent with prior changes in New Brunswick.  The bill passed first reading in November 2013, and is expected to be on the government's agenda for the spring 2014 sitting of the legislature. Following is an overview of the proposed changes put forth in the draft bill:

  1. Increase in No-Fault Accident Benefits

The government has proposed an increase in no-fault accident benefits available under the PEI standard auto policy (i.e. Section B benefits). The proposed increases are significant, and would apply to motor vehicle liability policies issued or renewed on or after April 1, 2014:

Click here to view table.

  1. Increase in the "Cap" for Minor Personal Injury

The government recommends an increase to the cap for minor personal injuries. If passed, the cap on non-pecuniary general damages for motor vehicle accidents occurring on or after April 1, 2014 would increase to $7,500 – up from the current amount of $2,500. The existing cap of $2,500 would continue to apply to accidents occurring prior to April 1, 2014.  The draft bill proposes the cap be indexed cumulatively in January of each year, beginning in 2016. If passed, the maximum recoverable amount will be the amount in place on the date of the accident.   

  1. Changes to the Definition of "Minor Personal Injury"

The draft bill not only increases the amount of the cap, but also seeks to amend the definition of "minor personal injury" to mirror the definition in Nova Scotia. The proposed definition will restrict "minor personal injuries" to sprains, strains or whiplash-associated disorders that do not result in a serious impairment – a significantly more narrow definition than currently exists in PEI.

What this means for you

Some or all of these amendments could be passed as law during the spring 2014 sitting of the legislature. The result will be greater benefits for accidents occurring on or after April 1, 2014, as well as new strategic considerations in the defence of auto-related personal injury claims in PEI.