Why You Need More Insurance Coverage

The Ontario government recently enacted significant changes to the auto insurance system in Ontario. These changes apply to Ontario motor vehicle accidents occurring on or after September 1, 2010. Most of us are unaware that our right to access statutory accident benefits will be significantly restricted after September 1, 2010 unless we choose to purchase optional coverage from our automobile insurer.

For over two decades people in Ontario who are injured in a motor vehicle accident have been entitled to statutory accident benefits (“accident benefits”) from their own auto insurance carrier. These benefits are available to the injured person regardless of who is at fault for the accident.

The September 1, 2010 changes significantly limit the amount of accident benefits available to injured people in the majority of cases. Except for catastrophic injuries such as quadriplegia or severe brain injury, people who are injured in an Ontario auto accident on or after September 1, 2010 will only be eligible for a maximum of $50,000 in medical and rehabilitation benefits from their own car insurer. These benefits are payable up to 10 years following the accident. Previously the maximum amount of medical and rehabilitation benefits available in these cases was $100,000 over 10 years. In addition, prior to September 1, 2010 approved assessments by medical professionals were payable under a separate part of the policy and did not reduce the $100,000 in medical and rehabilitation benefits. After September 1, 2010 these assessments will reduce the available $50,000 in medical and rehabilitation benefits.

We routinely see cases with seriously injured people who do not fit into the definition of catastrophic impairment and also exhaust their $100,000 in medical and rehabilitation benefits in less than a year. In similar cases the new medical and rehabilitation limit of $50,000 will be gone in a matter of months. How can people protect themselves and their loved ones from such a situation? They can do so by purchasing optional coverage to increase available medical and rehabilitation benefits to either $100,000 or $1,100,000 in a non-catastrophic case.

The amount of attendant care benefits available in a non-catastrophic case has also been reduced to $36,000 from $72,000 over two years following the accident. The government has also placed restrictions on who can provide the injured person with attendant care. In many cases people will now be required to hire a professional to provide them with care when previously a loved one was able to do so. Optional coverage is available to increase the available non-catastrophic attendant care benefits to $72,000 or $1,072,000.

Before September 1, 2010 people injured in Ontario auto accidents were able to access a housekeeping and home maintenance benefit of up to $100 per week for two years following the accident. This benefit is to help the injured person pay someone to perform the heavy household chores that they used to perform before the accident but which they are now unable to do.  This benefit is now only available in catastrophic cases or if the insured chooses to purchase optional coverage.

Under the prior regime a person who did not earn an income but acted as primary caregiver for a dependent child or loved one was able to access a caregiver benefit of $250 per week for the first person receiving care and $50 per week for each additional person receiving care. That benefit is now only available in catastrophic cases or via optional coverage.

As part of the recent changes the Ontario government has created a category of injury known as a “Minor Injury” which will limit a person’s  accident benefits claim to $3,500 in medical and rehabilitation benefits with no access to attendant care or other benefits. The definition of “Minor Injury” includes significant injuries such as a partial tear of your anterior cruciate ligament; an injury which usually requires surgery and a lengthy period of rehabilitation.

On a positive note, the government has now added single limb amputees to the definition of catastrophic impairment in the Statutory Accident Benefits Schedule. Previously a person had to lose two or more limbs before they met the definition of catastrophically impaired. In addition, family members who are suing regarding the death of a loved one will no longer have to pay a $15,000 deductible on any amount awarded for the loss of their loved one’s guidance, care and companionship.

The only way to protect yourself and your family from these significant reductions in available accident benefits is by speaking to your auto insurer or insurance broker about purchasing optional coverage.

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