Yorkton This Week.
By Kristen Groeneveld
Staff Writer
Starting Dec. 16, Saskatchewan residents will be given the ability to choose their
auto insurance coverage, effective Jan. 1, 2003. "From 1945 to 1995, 50 years,
we had the Tort system," explained SGI President Larry Fogg during a phone interview.
"From 1995 to currently, seven years, we have had No Fault. There are some that
prefer Tort and some that prefer No Fault. "We feel we are in a position where
we can offer Tort, which is really the Premier Option of the Coalition Against No
Fault Insurance."
All provincial residents are covered under the current No Fault coverage, which came
into effect in 1995. Starting Dec. 16, residents will be able to choose between No
Fault and Tort Coverage. Those unable to decide between the two will automatically
remain covered under No Fault. A change from No Fault to Tort insurance will take
effect Jan. 1, 2003.
"No Fault is a package of benefits that are fairly substantial, but you can
still sue for economic loss," explained Fogg. "With Tort, the package is
much less but you can sue for economic loss and for pain and suffering."
As outlined in the recent SGI publication Guide to Choosing Personal Auto Injury
Insurance which many provincial residents received through mail, defined benefits
make up only part of an injured person's claim settlement with Tort coverage. With
No Fault coverage, an injured person's claim settlement is made up almost entirely
of defined benefits. Both Tort and No Fault claimants can sue for expenses not covered
by the defined benefits, although defined benefits under Tort coverage are set at
lower levels. No Fault clients can sue for pain and suffering only under very limited
circumstances.
Fogg said while the two options are different, the majority of benefits paid out
through either type of claim come from the same place, the insurance company.
"If you can find an at-fault party, you can sue for pain and suffering with
Tort coverage," said Fogg. "If I had No Fault coverage (and caused the
accident) you couldn't sue me, but you would sue SGI."
A number of changes have been made to the Tort program since it was replaced in 1995.
Among the changes, "the package of benefits is improved," said Fogg. Income
replacement has gone from up to $200 per week to up to $300 per week and "the
death benefits have improved dramatically."
While the benefits packages may have been improved, a $5,000 deductible for pain
and suffering has also been added. Fogg said the idea of the deductible was developed
by the Coalition Against No Fault Insurance to try and eliminate some of the more
minor claims.
While no benefit changes will be made to No Fault, effective Jan. 1, Fogg said a
different appeal process will be established within the next couple months.
"We currently have three stages of appeal - internal, mediator and the Court
of Queen's Bench, but they are not working," Fogg said. The internal appeal
is believed to never be independent, he added, a mediator never works well and it
is costly to go through the Court of Queen's Bench.
SGI will be introducing an independent panel as an option for the appeal process.
Appeals will then go through either the independent panel or the Court of Queen's
Bench.
"The panel will be independent of SGI and will be under the Minister of Justice,
I believe," said Fogg. "It will make it a lot easier to appeal."
While there will not be a difference in cost between Tort and No Fault, Fogg said
there is a possibility that could change sometime in the future.
"It's difficult to know how many will opt for Tort coverage," he said.
"We need fair numbers to make it statistically valid, but if Tort claims cost
more we may have to raise Tort. If No Fault claims cost more, we may have to raise
No Fault."
When asked if there is a concern that customers will jump from one type of coverage
to another should there be a price increase on one, he said that is a possibility.
Fogg said providing coverage options will mean both No Fault and Tort clients will
have a greater chance of being sued and recommends drivers consult with their insurance
broker to ensure they have adequate coverage.