The Newfoundland government has introduced legislation aimed at cutting auto insurance costs by making some coverage optional.

CTV.ca News Staff

Newfoundland Premier Roger Grimes has introduced proposed legislation aimed at controlling soaring auto insurance premiums.

The legislation gives drivers the option to pay more for insurance premiums that would compensate them for pain and suffering if they suffered a non-permanent injury.

In a move critics suggest is aimed at stemming public anger over soaring premiums just before a provincial election, Grimes released new rules that could mean a 30 per cent reduction in liability premiums.

Drivers would be able to save money by declining such coverage, but would be ineligible for compensation for injuries like broken bones or whiplash.

Economic losses from missed work and medical costs will continue to be covered, as will permanent injuries and death.

"It's almost become a culture within the whole sector that if you're in an accident, whether you get hurt or not, you're entitled to some money just for the fact that you're in an accident," Grimes told reporters Tuesday.

Additional changes include removing the right of insurance companies to base rates on age, sex or marital status. Rates would also be frozen for one year.

Grimes said he hasn't decided whether to recall the legislature to pass the new laws before calling an election expected in October.

Soaring auto insurance rates have become a hot political topic across the Atlantic provinces. The issue proved costly to New Brunswick Premier Bernard Lord, whose majority was cut to one seat following a campaign singularly dominated by the issue of auto insurance.

After the election, Lord promised to cap awards for soft-tissue injuries at $2,500. Hearings were ordered, a legislature committee was struck to consider a public auto insurance system and companies were told to file new, lower rates with the Public Utilities Board.

But many have been slow to file reduced rates and a few are actually seeking sizable increases. Lord is still considering a referendum on whether a public system should be established.

In Nova Scotia, premier John Hamm introduced a $2,500 cap just before the province went to the polls and reduced his majority government to a minority.

Both New Brunswick and Prince Edward Island have introduced new rules to reduce premiums. Nova Scotia has legislation in the works.

The issue is also a major concern in Alberta, Ontario and P.E.I.

With a report from The Canadian Press.