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New definition of 'catastrophic' hurting accident victims

Changes to Ontario’s auto insurance rules could have major financial consequences for those involved in serious accidents, says Ottawa personal injury lawyer Najma Rashid.

The core changes include the amount of funding available for accident victims, as well as how “catastrophic impairment” is defined, says Rashid, partner with Howard Yegendorf & Associates LLP. The funding has been drastically diminished, and the test for meeting the catastrophic definition is now higher, meaning that basic auto insurance may not cover all the medical needs that are required, she says.

“In my opinion, the standards are much more arduous to meet,” Rashid tells AdvocateDaily.com. “Essentially, accident victims are getting a reduced level of benefits if they’re non-catastrophic, and if they are catastrophically injured then their benefits are reduced as well.

“It’s a much more complicated process to determine whether someone meets the catastrophic impairment definition because that definition has been completely overhauled in the new Statutory Accident Benefits Schedule (SABS).”

Rashid points to the CBC story of a southern Ontario man, who was struck while riding his motorcycle the same day the new rules came into effect earlier this year.

Although he suffered a whole host of injuries, including brain injury, his condition did not fall under the new definition of catastrophic, the article says. That means he has access to only $86,000 in compensation, which his family says doesn’t meet his medical needs and pushes them to the brink of bankruptcy.

If the accident had occurred just 12 hours earlier, when the old rules still applied, he would have been entitled to up to $2 million, CBC reports.

Rashid says the Ontario Trial Lawyers’ Association (OTLA) is trying to get the message out to the public that while insurance premiums were reduced so was insurance coverage. Optional insurance, if purchased, can make a difference for people who find themselves in a situation similar to the man seriously hurt in the CBC story.

And his situation serves as an unfortunate example of the impact of the new rules, she adds.

“You can be very, very seriously injured in an accident with a brain injury and your non-OHIP costs are exponential but because of the changes in the auto insurance legislation individuals like him will be left underfunded,” says Rashid. “We can see this is a perfect example of how the changes in the amount of funding available as well as the definition of catastrophic impairment are affecting the average motorist who finds themselves in a very serious collision, but they still do not meet the definition of catastrophic impairment.”

The threat of litigation may also see the man receive more money, CBC reports. The man’s lawyer has said that he intends to sue the other driver who also faces a charge of careless driving.

There is also a chance the man’s situation will later be categorized as catastrophic under the new rules, that would result in an increase to his funding.

The problem with both of those scenarios, says Rashid, is that any money he may be able to access through those processes won’t help him immediately, when he needs it most.

“This is when he needs that money, but instead, he has to wait,” she says.