Benefits Recently Cut FURTHER

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Benefits Recently Cut FURTHER

The Government of Ontario recently made major changes to standard automobile insurance policies. As of June 1, 2016, the amount of no-fault benefits available to accident victims has been significantly reduced. These cuts will leave those who are seriously injured in a motor vehicle accident at risk of being under-protected.

The changes to the Statutory Accident Benefits Schedule1, which governs all auto insurance policies in Ontario, are set out in the following table along with our comments highlighting the real impact of these changes:

Change EXPLANATION Impact
The standard benefit level for combined medical, rehabilitation and attendant care benefits is now $65,000 (down from a combined total of $86,000). Consumers will also have the option to increase that coverage up to $1 million. This is a cut of $21,000 to the standard benefits. The regime prior to June 1, 2016 provided for $50,000 in medical and rehabilitation benefits and $36,000 of attendant care benefits, for a total of $86,000 in available benefits. A decrease of $21,000 in available medical, rehabilitation and attendant care benefits for non-catastrophically injured victims.
Benefits for attendant care services for catastrophically impaired people are now combined with the $1 million limits for medical and rehabilitation benefits.  Consumers have the option to purchase additional coverage of $1 million, for a total coverage of $2 million. By combining attendant care with the limits for medical and rehabilitation benefits, the government has cut available benefits by $1 million. The regime prior to June 1, 2016 provided minimum coverage of $1 million for attendant care and $1 million for rehabilitation benefits. A decrease of $1 million in available attendant care and medical and rehabilitation benefits for catastrophically injured victims.
Consumers can now claim medical and rehabilitation benefits for only five years after the accident, rather than ten years. The regime prior to June 1, 2016 provided medical and rehabilitation benefits for 10 years after the accident. The new regime cuts the coverage duration to consumers by half. A decrease of the availability of medical and rehabilitation benefits from ten to five years for non catastrophically injured victims.
Consumers can now claim non-earner benefits for only 2 years after the accident, and the six-month waiting period has been eliminated (and replaced with a four week waiting period). Non-earner benefits are typically claimed by people who were not working at the time of the accident, such as students, stay at home parents and retirees. The change to non-earner benefits is a massive cute for people who were not employed at the time of the accident. Under the regime prior to June 1, 2016, a person could recover $185/week after a six-month waiting period until age 65 and a lessor amount for life thereafter (and students would qualify for an enhanced amount of $320/week after 2 years). That benefit would continue for as long as they had a complete inability to carry on a normal life. Now, a person can only receive two years of non-earner benefits, no matter how seriously they are injured or how long their injuries persist. A decrease of the availability of non-earner benefits from unlimited coverage to only two years.
Goods and services (e.g. medical treatment, assistive devices and medications) not explicitly listed in the Statutory Accident Benefits Schedule now must be “essential” and agreed upon by the insurer in order to be reimbursed or paid for by the insurance company. If goods or services are needed for your recovery, but are not explicitly listed in the legislation, they may not be covered by the new regime. This change even affects medical treatment and devices that are recommended by your doctors. What is “essential” is not currently defined in the legislation and the insurance companies can decide what you need for your recovery without reference to medical standards. A decrease of the availability of goods and services to “essential” items, which has not been defined.

These changes were reportedly made to reduce auto insurance premiums but, in fact, auto insurers have not reduced premiums since June 1, 2016 so these changes are really a reduction in services with no guarantee of savings to consumers.

These changes to the Insurance Act and the Statutory Accident Benefits Schedule affect the minimum amounts of coverage an insurance company must provide. If you want more, you must elect to pay a higher premium for optional benefits (and you should do so).

1Ontario Regulation 34/10, Statutory Accident Benefits Schedule – Effective June 1, 2016