Nova Scotia approves CAA credit-score discounts and changes to depreciation coverage

The Nova Scotia Regulatory and Appeals Board has approved a package of CAA Insurance Company automobile insurance changes that includes an optional credit-score discount and a 30 per cent premium increase for two limited waiver-of-depreciation endorsements. In its April 30 decision, 2026 NSRAB 67, the board authorized the changes for new business effective September 1, 2026, and renewal business effective November 1, 2026.

The approval covers CAA’s private passenger vehicle rates and risk-classification system. The stated overall premium increase is 0.5 per cent, not a 30 per cent increase across every policy. The changes also include a new class for tradespeople’s vehicles and restrictions on writing or expanding risks near severe-weather events.

Board member Bruce H. Fisher found the proposed rates and classifications just and reasonable and compliant with the Insurance Act and its regulations. Board staff reviewed the application, obtained responses to information requests and shared their recommendations with CAA, which had no further comments.

Credit information is optional

The approved Insurance Score variable uses credit information to determine eligibility for a discount. Customers must consent before CAA obtains a score from its supplier, but consent is not a condition of being insured. A customer who does not consent receives the non-discounted rate; a consenting customer may qualify for a discount, depending on the score.

The reasons say the score itself will not push a customer above the non-discounted rate. That limit is distinct from other approved changes to the insurer’s pricing: the package does not guarantee that any particular customer’s overall premium will remain unchanged.

CAA expects to refresh scores periodically. A customer can revoke consent at a renewal, with the policy reverting to undiscounted rates at the next renewal. Under the approach described to the board, only employees needing the actual score would have access to it; agents and brokers would see only the consent and date field.

CAA used its 2023–2025 claims experience from the Atlantic provinces and Ontario to assess the proposed score groupings. The board accepted staff’s recommendation to approve the variable and related base-rate adjustments intended to make its introduction revenue-neutral overall. That means reallocating premiums among risks, rather than collecting more in total because of the credit-score change.

Depreciation protection becomes more expensive

The two affected endorsements, NSEF#43R and NSEF#43R(L), protect against depreciation when an insured peril causes a total vehicle loss within 60 months of the original purchase or lease. CAA previously priced them using the vehicle’s collision rate group and its year of ownership.

The approved formula instead uses the higher of the collision and comprehensive rate groups. CAA told the board that total losses are not confined to collision claims and that the comprehensive group is higher about half the time. It also sought a 30 per cent premium increase for these endorsements, below the increase indicated by its analysis.

The board accepted staff’s assessment that the formula and premium changes were reasonable. The reasons describe their combined effect as a 0.5 per cent increase across the entire portfolio. This aggregate figure should not be confused with the change in the cost of an individual endorsement.

The broader application proposed rates below the overall indicated level, producing a projected return on equity of 7.22 per cent, below the board’s usual 10 per cent target. It also adopted the 2026 Canadian Loss Experience Automobile Rating table for physical-damage coverage, with adjustments to offset that table’s overall premium effect. CAA proposed no changes to its territories or territorial differentials.

Tradespeople and severe-weather restrictions

The new artisan class covers vehicles used by tradespeople travelling to jobs and carrying tools. It uses business-use Class 07 rates, and CAA’s business-use definition will remove restrictions on kilometres driven. The company had not previously written these artisan risks.

An attached-machinery exclusion must be included for artisan vehicles, without a premium for that endorsement. It excludes loss or damage resulting from the ownership, use or operation of the described mounted or attached machinery at its intended work site. The decision does not describe the new class as unrestricted business-equipment coverage.

The approved underwriting changes also restrict writing coverage, increasing coverage or adding new risks within a 25-kilometre radius of an area subject to a government-issued severe or extreme weather warning, watch or advisory. The restriction continues until the emergency or major weather event or fire is over and lifted. CAA cited events including hurricanes, tornadoes, windstorms and resulting floods.

The board accepted staff’s conclusion that the underwriting changes did not violate the Act or regulations. The restriction concerns writing or expanding risks; the reasons do not say that existing insured losses become automatically excluded whenever a warning is issued.

The board also required CAA to file an updated electronic insurance manual within 30 days of the order’s issuance and set February 1, 2028, as its next mandatory filing date. The published reasons say an order would follow. This report describes the approval and its specified effective dates, not independently verified implementation, an individual renewal quote or subsequent compliance.