Insurance Industry Lobby
In the early 2000’s, the insurance industry was in a cyclical low of profitability. The industry argued that escalating injury claims were the cause, that legislative reforms were needed to cap the compensation available to injury victims, and that without such reforms Alberta’s auto insurance industry would not be sustainable. By 2004, the insurance industry’s profits had recovered, but momentum for new legislation was in place and the minor injury law was introduced in Alberta.
Minor Injury Cap Introduced
- Alberta’s “minor injury cap” was introduced in 2004. The cap was implemented following an aggressive lobbying effort by the insurance industry.
- The purpose of the law was to cap compensation for pain and suffering for “minor” soft tissue injuries (such as sprains and strains) that resolved within three months. When the law was introduced, the cap was $4,000 to be adjusted periodically with inflation. The current cap is $5,202.
- The minor injury cap was implemented through a complex series of legislation & regulation that resulted in substantial uncertainty, confusion and frustration for the legal, medical and insurance industries.
Uncertainty and Litigation
After years of overreach by insurers in terms of the application of the law, and subsequent litigation, the courts have clarified that the cap only applies to minor soft tissue injuries of short duration. In other words, the courts have applied the minor injury cap as it was intended. These Court decisions have prompted the insurance industry to lobby the government to expand the definition of the minor injury cap.
Ongoing Efforts to Expand the Minor Injury Cap
- The courts’ application of the minor injury cap in accordance with its original intent was not satisfactory to the insurance industry, and their lobbying efforts to expand the definition of the cap have continued. In 2018, insurers were successful in convincing the government to expand the application of the cap to jaw injuries, and other forms of physical and psychological conditions.
- The insurance industry continues to recycle many of their “sky is falling” arguments from 2004, including claims that injury claims and costs are rising, that auto insurers are unprofitable in Alberta, and that auto insurers are going to leave the province. These arguments are tenuous and are not supported by facts.
- A new provincial government is elected. The insurance industry is once again lobbying the new Alberta government for further expansion of the Minor Injury Cap.
- FAIR is created to help fight for the rights of Albertans and prevent further expansion of the Minor Injury Cap.