The Small Claims Court of Nova Scotia recently had reason to consider the new s. 138A of the Insurance Act, which came in force on April 1, 2013. That section allows for direct compensation from an insured’s own insurer for property damage in a no-fault manner. In the case of MacCallum v. Gamache, the adjudicator held that the Claimant, who had sustained damage to her vehicle in a minor collision and who did not have collision insurance, could not simply pursue the Defendant but had to follow the steps contained in the new section. The Court noted:
“There is only one way to read these provisions.
a. If a party (such as the Claimant) has a standard auto insurance policy (with or without collision coverage) … (which she does)
b. And is involved in an accident with another vehicle which is also insured in Nova Scotia ….. (which it was)
c. and there is only property damage (i.e. no personal injury) …. (which is the situation here)
d. the Claimant must look to her own insurer for the property damage claim, and cannotsimply pursue the other driver.”
The decision mentioned that the Claimant had asked several lawyers and was advised that she could pursue recovery against the Defendant. As noted by the adjudicator, “©learly word of this new regime has not fully penetrated the legal community.”
The adjudicator also noted, “(i)t appears that the intention of this new regime is to make it easier, not harder, for claimants to get quick compensation for property damage claims. The reason that there must be insurance on both sides, is that the cost of providing the additional coverage (from one’s own insurer) is presumably offset by the savings that the insurer achieves by not having to answer to tort claims.”