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Beament Hebert Nicholson LLP Blog

Congratulations Ontarians; You Now Have Lower Coverage!!

Do you know how much lower your insurance premiums are today? Spoiler alert: they have not gone down. Ontario has the highest auto insurance rates in Canada. BUT for the same price as yesterday you now have MUCH less coverage!!

The Ontario Government recently made amendments to automobile insurance that kick in on June 1, 2016. While some of these are already in effect, as of June 1 the following is a summary of recent changes:

• Catastrophic injury medical rehabilitation and attendant care benefits in aggregate have been cut in half on June 1, 2016, from $2,000,000 to $1,000,000;
• Non-catastrophic medical rehabilitation and attendant care benefits in aggregate have been reduced by approximately 25%, from $86,000 to $65,000 (these had previously been reduced from $176,000 in September 2010, meaning benefits have been reduced by 63% in under six years);
• Total time to claim non-catastrophic benefits have been cut in half, from 10 to 5 years;
• Deductibles on pain and suffering / loss of companionship damages have gone up approximately 23% since July 2015:

  • For individuals: from $30,000 to $36,900;
  • For Family Law Act claimants: from $15,000 to $18,500;
  • The individual non-deductible threshold was raised from $100,000 to $123,000;
  • The Family Law Act non-deductible threshold was raised from $50,000 to $61,500;

• Pre-judgment interest on damages for pain, suffering and loss of companionship have been reduced from 5% to 0.8% (now tied to the Courts of Justice Act);
• The option to sue in Court for accident benefit disputes has now been abolished (you now must arbitrate any disagreements);
• Significant changes to how “minor injuries” and “catastrophic injuries” are defined; and
• Top end long term non-earner benefits entitlements reduced by over 97%, from $185/week for two years then $320/week for life (with reductions at age 65) to $185/week for two years ONLY (benefit now limited to two years maximum).

In 2010 insurance companies successfully lobbied the Ontario Government to slash rates and implement a new “minor injury guideline” in an attempt to cut fraud and lower rates. The overwhelming majority of claims are for minor injuries. Many of these changes made sense, although our office regularly meets with people with significant injuries inappropriately deemed “minor.”

The changes made today certainly do not appear to target fraudsters. People who are catastrophically injured have typically suffered severe traumatic brain injuries, are in wheelchairs or have had limbs amputated. These same people who are attempting to adjust to a new reality are seeing their care budgets cut in half. Many people who are not catastrophic have follow up surgeries or complications and their injuries are not resolved after five years.

We do have public health care in Ontario, and cutting these insurance benefits means an already clogged public system with less money available from taxpayers will now be further burdened by people who paid for insurance to be looked after in the event of an accident. Taxpayers will shoulder this burden so that insurance companies can increase their profit margins.

These changes will not impact a lot of people in Ontario, but they will severely impact the few who do need it, right when they need it most.