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New Proposed Changes for Car Insurance

November 02, 2009, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer

November 2, 2009 10:15 AM

The McGuinty government's proposed package of automobile insurance reforms would help keep insurance premiums affordable for Ontario drivers. The changes would provide consumers with more choice and flexibility to purchase coverage that best meets their protection needs and budgets.
Drivers would continue to have access to existing choices. They would also benefit from a wider range of options on medical and rehabilitation benefits, attendant care, housekeeping expenses, home maintenance expenses, caregiver expenses, death and funeral expenses, court compensation, and compensation for property damage.
Drivers would be able to better integrate their automobile insurance with private disability insurance coverage, or individual or group health insurance coverage.
The government will work with the insurance industry, health care providers and consumer groups to make drivers aware of, and help them understand, the new choices available to them when purchasing auto insurance.
 
STATUTORY ACCIDENT BENEFITS
Consumers would be able to work with their insurance agent/broker to choose adequate accident benefit coverage. These benefits are provided by insurers to those injured in automobile accidents. They include payments to recover expenses for medical and rehabilitation, attendant care, housekeeping and home maintenance, funerals, as well income replacement and payment following the death of an insured person.
The government would create a basic package of statutory accident benefits that lowers compulsory medical and rehabilitation benefits coverage to $50,000 and attendant care benefits coverage to $36,000 for non-catastrophic injuries.
Drivers could purchase $50,000, $100,000 or $1 million of medical and rehabilitation benefits coverage. They would also have the choice to purchase $36,000 or $72,000 in attendant care benefits coverage.
Ontario's basic medical and rehabilitation benefits would remain the most generous in Canada, when compared to other provinces with similar auto insurance marketplaces.
Statutory Accident Benefits: Coverage Comparison
The following table compares current statutory accident benefit coverage with the government's proposed basic package, and illustrates choices that consumers would have when buying or renewing their policies.
 

Coverage
Current Coverage
Proposed Basic Coverage
Proposed Consumer Choices
Medical and Rehabilitation (non-catastrophic)
  • $100,000 (non-catastrophic)
  • $1 million (catastrophic)
  • $50,000
  • $1 million (catastrophic)
  • Coverage includes assessments
  • $100,000; $1 million ($1 million option includes attendant care)
  • Coverage includes assessments
Medical and Rehabilitation (catastrophic)
  • $1 million
  • $1 million
  • Coverage includes assessments
  • $1 million
  • Coverage includes assessments
Attendant Care
  • $72,000 (non-catastrophic)
  • $1 million (catastrophic)
  • $36,000 (non-catastrophic)
  • $1,000,000 (catastrophic)
  • $72,000 ($1 million medical and rehabilitation option includes attendant care)
Housekeeping and Home Maintenance Expenses and Caregiver Expenses
  • Caregiver benefit: up to $250 per week plus $50 per dependant; housekeeping and home maintenance up to $100 per week
  • Benefits available for catastrophic injuries
  • Caregiver benefit: up to $250 per week plus $50 per dependant; housekeeping and home maintenance up to $100 per week (non-catastrophic)
Income Replacement
  • Maximum $400 per week; 80 per cent of net income
  • Maximum $400 per week; 70 per cent of gross income
  • Maximum $1,000 per week; 70 per cent of gross income
Death and Funeral
  • $25,000 (eligible spouse); $10,000 (each dependant), maximum $6,000 funeral expenses
  • $25,000 (eligible spouse); $10,000 (each dependant), maximum $6,000 funeral expenses
  • $50,000 (eligible spouse); $20,000 (each dependant), maximum $8,000 funeral expenses

 
COMPARING ONTARIO TO OTHER PROVINCES
The following table compares statutory accident benefit coverage in provinces with similar auto insurance marketplaces.
 

Province / Territory
Medical and Rehabilitation Benefit Limits
Alberta
$50,000
Newfoundland and Labrador
$25,000 (optional)
New Brunswick
$50,000
Northwest Territories and Nunavut
$25,000
Nova Scotia
$25,000
Prince Edward Island
$25,000
Yukon
$10,000
Ontario (Proposed Basic Package)
  • $50,000 (non-catastrophic)
  • $1 million (catastrophic)
Ontario (Proposed Consumer Choices)
  • $100,000; $1 million (non-catastrophic)
    ($1 million option includes attendant care)
Drivers with either level of coverage would be eligible for $1 million in the event of a catastrophic injury.

Ontario's basic medical and rehabilitation benefits would remain the most generous in Canada, when compared to other provinces with similar auto insurance marketplaces. Ontario would be the only province with privately delivered insurance to provide additional coverage for people who suffer more serious injuries.
THIRD-PARTY LIABILITY
The proposed basic automobile insurance policy would include $200,000 in third-party liability coverage. Drivers would continue to have the option to buy $500,000, $1 million, $2 million or another amount in third-party liability.
Third-party liability provides compensation on behalf of an at-fault driver in an accident, to cover injuries to any other person or their property. According to the Financial Services Commission of Ontario, approximately 99 per cent of drivers currently purchase more than the mandatory minimum $200,000 in coverage.
If you are injured in an accident, your injuries are serious enough and you are not at-fault, you can sue the at-fault driver for pain and suffering. The current deductible that applies to court awards for pain and suffering is $30,000 ($15,000 for family members).
The government is proposing to give vehicle owners, on purchase of their insurance policy, the option to buy additional coverage that would have the effect of reducing the deductible to $20,000 ($10,000 for family members). The coverage would apply to the owner as well as the owner's spouse and dependants when they are injured in an accident. This would give innocent people injured in an auto accident greater access to additional financial compensation through the court system. The proposed basic automobile insurance policy would continue to include a $30,000 deductible ($15,000 for family members).
Third-Party Liability: Coverage Comparison
The following table compares current third-party liability coverage with the government's proposed basic package, and illustrates choices that would be available to consumers purchasing or renewing auto insurance policies.
 

Coverage
Current Coverage
Proposed Basic Coverage
Proposed Consumer Choices
Third-Party Liability
  • $200,000 (Mandatory Minimum)
  • $1 million (market practice coverage)
  • $200,000
  • $500,000, $1 million, $2 million, (other) [ Same as current options]
Compensation through the Court System
  • $30,000 deductible (not-at-fault accident victims); $15,000 deductible (family members under the Family Law Act)
  • $30,000 deductible (not-at-fault accident victims); $15,000 deductible (family members under the Family Law Act)
  • Reduce to: $20,000 deductible (not-at-fault accident victims); $10,000 deductible (family members under the Family Law Act)
 

Ontario's Proposed Auto Insurance Reforms
 
 
November 2, 2009 10:15 AM
The McGuinty government has announced a package of 41 reforms to automobile insurance in Ontario. 
The proposed reforms, introduced by Finance Minister Dwight Duncan, are based on recommendations provided by the Superintendent of the Financial Services Commission of Ontario's Five-Year Automobile Insurance Review report, as well as feedback received from dozens of insurance industry, health care, legal and consumer experts and groups.
The reforms would streamline a number of processes for insurers and health care providers, create a less complex auto insurance system, and protect consumers while giving them more choice to buy coverage that best meets their protection needs and budgets.
The government's package of automobile insurance reforms includes the following proposals:
 
MEASURES TO PROTECT CONSUMERS
  • Prohibit objectionable quoting practices including the use of credit scoring, delays in providing quotes, requiring written applications for quotes and certain screening techniques.
  • Expand the definition of "catastrophic impairment" to include single-limb amputees.
  • Consult with the medical community to amend the definition of "catastrophic impairment" and redefine the threshold for catastrophic brain injuries.
  • Increase the efficiency and effectiveness of treatment for minor injuries (whiplash, sprains and strains).  Under the proposed reforms, a new guideline would be developed to provide for a greater variety of care for minor injuries.  The goal of this guideline would be to reflect current scientific and medical literature.  It would be focused on treatment outcomes and provide health care providers with numerous milestones that could be used to measure progress.
  • No element of a risk classification system would use past claims for which a driver is 25 per cent or less at-fault.
  • Make mandatory the existing statutory appraisal process under section 128 of the Act on insurers for property damage claims if the consumer prefers this process over the courts.
  • Amend Regulation 283/95 to make it more difficult for insurers to deflect claims and to ensure that claimants receive accident benefits while the issue of liability for a claim is resolved.
  • Amend the Ontario Standard Auto Policy to provide a limited amount of additional coverage for vehicles with a Gross Vehicle Weight rating over 4,500 kg.
  • The attendant care benefit would continue to compensate claimants for incurred expenses. However, to enhance consumer protection and transparency, the SABS would clarify that where an arbitrator has found that the insurer has been unreasonable in denying the attendant care benefit, payments should be made even if no expenses have been incurred.
  • The health care professional associations and the insurance industry should jointly develop standards for the delivery of third party medical examinations as well as qualifications for assessors. FSCO would facilitate the process.
  • FSCO would to continue to monitor fees and the availability of services in the auto insurance sector, in particular for seriously injured claimants.
  • Insurance claims departments need to better focus on the needs of claimants with serious injuries. The Insurance Bureau of Canada, Insurance Institute of Ontario and the Ontario Insurance Adjusters Association could work together to train adjusters on the needs of claimants with serious injuries to reduce exposure to potential allegations of unfair and deceptive acts or practices.
  • Conduct annual review of reimbursement rate for travel in a personal vehicle.
  • Consumers, health care providers and insurers could work together to improve consumers' awareness and expectations around treatment and outcomes. Some of the savings from changes in the accident benefits system would be used to fund these educational efforts.
  • The government would consider legislative amendments to reflect the unique status of public transit services operated by municipal authorities by excluding injuries from no-fault where no collision has occurred.
  • Auto insurers should explore and take advantage of their existing ability to implement electronic commerce options under Ontario's Electronic Commerce Act, 2000.
  • The government would consider harmonizing the reports required under sections 289, 289.1 and 417.1 of the Insurance Act.
 
MEASURES TO INCREASE CONSUMER CHOICE
  • Provide consumers with more choice by reducing the minimum coverage for medical and rehabilitation benefits, attendant care, deductibles on court awarded compensation, and a direct compensation - property damage deductible.  Consumers would have an option to increase any of these coverages.
  • Reduce the cap for medical and rehabilitation benefits for non-catastrophic claims to $50,000.  Introduce a $100,000 optional medical and rehabilitation benefit along with the existing $1 million optional benefit.
  • Provide an option to reduce the tort deductibles to $20,000 (not-at-fault accident victims) and $10,000 (family members under the Family Law Act), provide that the deductibles do not apply in the case of fatalities; and do not revoke the definition of serious and permanent impairment set out in Regulation 461/96.
  • Make housekeeping and home maintenance expenses and caregiver benefits optional. Reimbursement for housekeeping and home maintenance expenses and for replacement caregivers would reflect actual economic losses.
 
MEASURES TO STREAMLINE THE AUTO INSURANCE SYSTEM AND REDUCE TRANSACTION COSTS
  • Assessment costs would be limited to $2,000 per assessment and the fee for completing forms including any assessment required to complete the form would be capped at $200.  This would also be included as part of a person's medical and rehabilitation accident benefits, whether they opt for the basic level or additional coverage.  Insurer examinations would also be limited to $2,000 per assessment and rebuttal examinations would be completely eliminated.
  •  As an interim measure, those who suffer minor injuries in car accidents would receive $3,500 worth of treatment and assessments.  This would be included as part of a person's medical and rehabilitation accident benefits, whether they opt for the basic level or additional coverage.  It would be focused on treatment outcomes and provide health care providers with numerous milestones that could be used to measure progress.
  • Further consultations will be held with health care providers, insurers and consumers to establish the best approach to control medical and rehabilitation costs, while continuing to enhance medical care for people injured in accidents.
  • The government will form a stakeholder advisory committee, made up of experts from various sectors of the automobile insurance industry, health care providers and legal professionals.  Consumers will also be represented on the committee.
This committee will help advise the government on longer-term reforms, including improved outcome-based treatment protocols for minor injuries, as well as establish the best approach to control medical and rehabilitation costs while ensuring consumer choice of health care providers when obtaining treatments and assessments.
  • Reduce the interest rate chargeable on overdue Statutory Accident Benefits Schedule (SABS) payments by insurers to one per cent per month compounded monthly (from two per cent per month compounded monthly).
  • Review the SABS to identify provisions that: a) are overly complex and could be simplified without changing the intent of the Regulation, or b) are essentially ineffective and could be eliminated without changing the impact of the Regulation.
  • Section 24 assessments expenses would be subject to the same maximum monetary and time limits that apply to medical and rehabilitation benefits under section 19 of the SABS.
  • The time frame provided to adjusters to review assessment requests would be the same as the time frame that applies to treatment plans (10 business days) to allow for proper claims handling.
  • Availability of in-home assessments would be limited to seriously injured claimants and would only be used to evaluate their need for attendant care services and home modifications.
  • Restrict the ability to conduct catastrophic impairment assessments to practitioners with appropriate training and experience.
  • Provide adjusters with some discretion in reviewing assessment and treatment requests and modify Ontario Regulation 7/00 to reflect proposed amendments to the SABS.
  • Revoke section 42.1 of the SABS, which allows claimants to obtain an assessment from their health care provider to address issues raised in an insurer examination.
  • Only occupational therapists and nurses who have been trained on the use of Form 1 would be permitted to assess auto accident victims for the attendant care benefit. This would apply to assessments conducted under both sections 24 and 42 of the SABS.
  • Amend the SABS to provide for an appropriate cap on the cost of accounting reports to substantiate a claim for weekly benefits.
  • The cost of future care cost reports would not be an expense recoverable under the SABS.
  • When determining the merits of any future regulatory changes, consideration would be given to whether a change would increase complexity and regulatory burden. There should be a compelling reason for making a change that would add complexity to the accident benefit system.
  • Contract a forms consultant to assist the Financial Services Commission of Ontario (FSCO) and stakeholders in simplifying the application process and revising forms that should first be tested on consumers.
  • Provide best practice guidelines that would set out standards for communicating information on the fault determination process and how to challenge a determination.
  • FSCO, Workplace Safety and Insurance Board and auto insurers would meet to discuss how to better harmonize the auto insurance and workplace insurance systems.
  • Investigate options for enabling auto insurers to more effectively enforce existing provisions in the SABS and the Insurance Act that require deductions of all collateral sources of income benefits.
 
IMPLEMENTING THE REFORMS
The Minister of Finance intends to implement automobile insurance reforms as part of a regulations package that would become effective in summer 2010, and continue to explore further longer-term measures. 
Posted under Accident Benefit News, Automobile Accident Benefits, Brain Injury, Car Accidents, Catastrophic Injury, Disability Insurance, Pain and Suffering, Treatment

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About Deutschmann Law

Deutschmann Law serves South-Western Ontario with offices in Kitchener-Waterloo, Cambridge, Woodstock, Brantford, Stratford and Ayr. The law practice of Robert Deutschmann focuses almost exclusively in personal injury and disability insurance matters. For more information, please visit www.deutschmannlaw.com or call us toll-free at 1-866-414-4878.

It is important that you review your accident benefit file with one of our experienced personal injury / car accident lawyers to ensure that you obtain access to all your benefits which include, but are limited to, things like physiotherapy, income replacement benefits, vocational retraining and home modifications.

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