Protecting Premiums Rather than People

July 16th, 2015 by Marc Spivak

The 2015 Ontario Budget was announced on April 23, 2015. The budget plan unexpectedly includes major amendments to the Insurance Act, that will affect the benefits available to catastrophically impaired accident victims. The Budget states that the purpose of these amendments is to take “further action to protect auto insurance consumers and ensure affordable premiums…”

The amendments which the Ontario government will make to the Insurance Act include the following:

  • The definition of catastrophic impairment will be updated to reflect more up to date medical information and knowledge. It is likely that the modified definition will serve to exclude additional seriously injured accident victims from the definition of catastrophically impaired and will significantly reduce the benefits available to them.
  • The maximum available benefits for medical and rehabilitation benefits and attendant care services will be a combined total of $65,000 (unless optional benefits have been purchased). Currently, the limits are $50,000 for medical and rehabilitation benefits, and $36,000 for attendant care services (a total of $86,000). However, consumers will have an option to increase this coverage to up to $1 million.
  • Attendant care services will be included within the $1 million medical and rehabilitation benefit limit available for accident victims with catastrophic impairments. Currently, the maximum benefit available for catastrophically impaired people is $1 million in medical and rehabilitation benefits and an additional $1 million for attendant care services (a total of $2 million). Consumers will have the option to purchase additional coverage of $1 million.
  • Often seriously injured accident victims require more than the $2 million presently available.
  • The maximum duration for medical and rehabilitation benefits will be reduced from 10 years to 5 years for all claimants except children.
  • The 6 month waiting period for non-earner benefits will be eliminated, however, the duration of non-earner benefits will be limited to 2 years after the accident. This potentially will have a drastic impact on retirees, stay at home spouses and students.
  • Goods and services that are not explicitly listed in the Statutory Accident Benefits Schedule will be required to be “essential” and agreed on by the insurer. Insurers often have a very different view of what is “essential” from that of accident victims
  • The deductible on court awards for pain and suffering will be increased from $30,000 around $37,000 (Juries which decide the awards to be given to car accident victims are not allowed to be told that it is an insurer paying the award nor that $30,000, soon to be $37,000, will be deducted from the amount awarded by the jury).

The impact of the above amendments is that the benefits and compensation available to victims of car accidents will once again be reduced. Previous reductions in benefits have not proven to reduce the cost of car insurance premiums. The Ontario government seems to have a hidden agenda. Ask your MPP why!

To protect yourself, call your insurer or broker today to ask about optional benefits on your car insurance policy. The cost of these may be considerably less than you think.

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