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Accident Benefits for Ontario Injury Clients

Ontario’s Changes to Automobile Insurance: Less Is NOT More

It seems like only yesterday that I wrote an article about the changes to the Statutory Accident Benefits Schedule that took effect on September 1, 2010 (https://www.obj.ca/Blog-Article/b/11738/The-New-Insurance-Landscape-for-Automobile-Accidents). The accident benefits available to car accident victims had been slashed considerably at that time, with medical/rehabilitation benefits reduced by 50%, from $100,000 to $50,000, as one example. Housekeeping benefits had been eliminated for non-catastrophically-injured victims, and, Attendant Care benefits were subject to harsh and, in my opinion, insurmountable pre-requisites.

Under the guise of “reducing Ontario’s costs in the auto insurance system,” the Ontario budget, announced on April 23, 2015, has further eroded the auto insurance accident benefits available to victims of car accidents. Additionally, the budget has proposed significant changes to the tort system, substantially impacting a victim’s right to sue where they have sustained a permanent and serious injury in a car accident.

Here is a summary of the changes that were introduced as part of the budget:

In addition, the test for receiving medical-rehabilitation funding has now changed from “reasonable and necessary” – the threshold test for the past 20 years – to the more stringent “essential.”

The definition of a “catastrophic” injury has been undergoing revision for years. The Ontario government has proposed further limiting measures to the definition, undoubtedly with the result that more people will find themselves within the $65,000 funding category summarized above.

With the drastic reduction in funding available to car accident victims for their therapies, nursing care, and other health care costs, the Ontario government has simultaneously decided to limit the amount of compensation available to victims whose injuries are serious enough to allow them to pursue tort compensation (that is compensation, by way of lawsuit). Most notably, the $30,000 statutory deductible for pain and suffering awards (introduced in 2003) will now be indexed to inflation. At the moment, that inflation-adjusted deductible is almost $40,000.

Currently, the deductible “vanishes” for pain and suffering claims worth $100,000 or more. The Ontario government has proposed that that threshold is also subject to changes in inflation. Taken together, individuals who have sustained serious and permanent injuries in car accidents will now have a larger deductible coming off their claims, and, their injuries must be serious enough to warrant a damages award of approximately $137,000 (in today’s dollars) for that deductible to vanish.

Those of us who work in the insurance and accident industry know that OHIP-funded care is insufficient to meet the often complex care needs of those who have been injured in car accidents. OHIP does not fund psychology, private nursing care, occupational therapy, dental work, home modifications, medications, etc. Often the needs of accident victims are multi-factorial and multi-disciplinary, and even at pre-2010 levels, serious but non-catastrophically injured claimants often quickly used up their $100,000 (and, more so after 2010, $50,000) in medical-rehab funding.

While the proposed budgetary changes benefit the insurance companies and may, hypothetically, reduce auto premiums for the consumer, the stark reality is that this reduction in auto premiums means that car accident victims will get a corresponding reduction in the funding available for their medical and rehabilitation needs. This will result in a situation where injured victims of car accidents will pose a heavier burden on an already over-taxed public health care system.

Now more than ever, Ontarians must discuss with their insurance brokers the optional insurance coverage that they may purchase in order to bring the accident benefits back to pre-2010 levels. (https://www.yegendorflawfirm.ca/enhancing_your_coverage_with_optional_insurance_benefits)