Cap On Compensation For Whiplash Injuries To Be Reviewed

Car insurers in Canada are predicting a steep hike in insurance premiums if a current cap on compensation payments is removed. The average increase in rates is estimated at around eleven percent, which is a huge increase and way above the rate of inflation.

This percentage increase will translate to between $60 and $75 Canadian dollars per policy, adding another strain to individual’s finances. Currently a report is being prepared ahead of the debate which will determine whether limits on compensation should be lifted or remain in place.

Currently the reduction in insurance premiums in Canada over the last couple of years has been due to the Minor Injury Regulation. This was put in place to regulate the insurance market in regards to compensation pay out for smaller injuries such as whiplash and other soft tissue injuries. A cap was introduced on these types of injuries which has saved the insurance companies a considerable amount of money. However in February, this cap was ‘struck down’ by a Court of Queen’s Bench ruling and is due to be heard in the Alberta court of Appeal in September. If the cap removed insurance costs will undoubtedly go up, for whiplash injuries and the there will be no limit to the amount of compensation which can be awarded.

Many people including lawyers and consumer groups are in favour of the cap being removed. Putting a price on an injury can be a difficult thing to do. Injuries such as whiplash can manifest themselves in different ways and sometimes the severity of the injury is not completely known until sometimes after the event. In addition soft tissue injuries and whiplash can result in varying amounts of pain and suffering dependant on how the injury was sustained. If is not necessarily true that those injuries in low speed car accidents will come off than better than those caught up in high speed car pile ups. Imposing a limit on the amount of compensation to be awarded may be detrimental to those people whose injuries will result in long-lasting effects.

At the moment everybody is waiting for the outcome of the appeal. Those people who have claims for compensation already in the pipeline do not want to complete them until the ruling has been made, in case they miss out on the opportunity to increase their compensation One reason that the cap is under debate is that it could be considered to undermine the right of individuals to receive fair compensation for their injuries. Going forward consumers want to be sure that they can secure the money they need in order to survive after an accident. On the other side, those for the cap argue that the costs could spiral out of control which may destabilise the insurance industry unless huge hikes in premiums are introduced. The insurance industry are working hard to strengthen their case against the cap being removed but only time will tell whether or not they are going to be successful.

Danielle is an author of several articles pertaining to No Win No Fee, Compensation Claims, Personal Injury Claims and other legal articles.