What the June 2016 Changes to Ontario Automobile Insurance Regulations Mean to You

Once again the Ontario government is changing the auto insurance system in Ontario.  Unfortunately, these changes seem designed to ensure and enhance the profits of the companies that sell these policies at the expense of offering less coverage to the insured and reducing treatment and assistance available to the most seriously injured and vulnerable Ontarians.  Since auto insurance in mandatory, the government plays a large role in setting out just how much coverage your policy will cost you and what coverage it will provide.  It appears the insurance lobby has once again been successful in convincing the provincial government to reduce coverage at the expense of injured victims.

Some Background about Ontario Auto Insurance Regulations

In Ontario, you are required to purchase insurance to cover you should you be involved in a car accident. There are four types of coverage that are required.

Third party liability: In Ontario, drivers must carry at least $200,000 in liability. This protects you should someone be injured or killed or property is damaged. This coverage also pays defense costs, to a set limit, to settle claims against you.

Accident Benefits: These benefits cover expenses not covered by OHIP such as rehabilitation, medical, loss of income, or caregiving, regardless of who caused the accident. These benefits have set maximums, but according to the new regulations, you can purchase additional coverage.

Direct Compensation Property Damage: Covers damage to your vehicle  and its contents and equipment if another party is identified at fault for the accident.

Uninsured Automobile: Covers you if you or your family is involved in a hit-and-run accident or one that involves an identified uninsured driver.

Types of Injuries Covered by Accident Benefits

Catastrophic: Paraplegia, quadriplegia, loss of limb, blindness, Traumatic Brain Injury (based on assessment of specific criteria). Automatic designation for children with Traumatic Brain injury in specified circumstances

Non-Catastrophic: minor injuries such as sprains or whiplash and more  serious injuries such as serious strains, broken bones.

The Changes to Accident Benefits

As of June 1, 2016, accident benefits are changing, and the adjustments to coverage will affect medical, rehabilitation, and attendant care benefits. The changes involve maximum payouts as well as providing for the ability to increase coverage according to your specific needs. Additionally, definitions of catastrophic injuries and how they are identified have been modified. These changes are relevant for accidents that occur after the June 1, 2016 effective date.

Medical and Rehabilitation: These benefits reimburse you for reasonable necessary expenses not covered by OHIP or your Extended Health Benefits offered by your employer. Some examples of services include physiotherapy, occupational therapy, and speech therapy.

Attendant care: Reimbursement for an attendant to help care for an injured person, whether at home or in a healthcare facility.

Accidents that Occur Prior to June 1, 2016

Non-Catastrophic: $50,000 maximum for medical and rehabilitation + $36,000 for attendant care

Catastrophic: $1,000,000 maximum for medical and rehabilitation + $1,000,000 for attendant care

Accidents that Occur After June 1, 2016

Non-catastrophic: $65,000 combined for medical, rehabilitation and attendant care

Catastrophic: $1,000,000 combined maximum for medical, rehabilitation and attendant care

Net Changes

Non-catastrophic: reduction of $21,000 in overall maximum benefits

Catastrophic: reduction of $1,000,000 in overall maximum benefits

Note: maximum medical, rehabilitation and attendant care for minor injuries remains the same at a $3,500.

Optional Coverage

Drivers now have the opportunity to purchase additional coverage to supplement the standard maximums up to $3,000,000 in coverage dependent on the type of injury and care or services required.

Conclusions

While the government and insurance industry claim that these coverage reductions have been implemented to make auto insurance benefits more affordable for all Ontarians, it remains to be seen, how much, if any of the savings will be passed on to consumers in the form of lower rates.  One major study suggests that Ontario consumers have been overcharged hundreds of millions of dollars in premiums in the last few years.  There is no evidence to indicate that these changes will result in anything but an extension of that trend.

What is clear is that these cuts will greatly reduce the treatment and care available for those injured in car crashes with the greatest negative impact on those who suffer the worst injuries.

If you have questions about the changes to Ontario’s Auto Insurance coverage or how the changes to coverage might affect you, please contact us or an experienced insurance broker.