Canada: The Hidden Costs Of Ontario's Proposed Auto Insurance Changes

On April 11, 2019, the Ontario government presented its budget, in which it announced "Transformative Auto Insurance" reforms. The budget contained proposals that are the first steps in what the Ford government intends to be a multi-year overhaul of Ontario's auto insurance system.

While the need to address the costs of auto insurance in Ontario is widely acknowledged, it is important to recognize that accident victims tend to have very different experiences and views on the costs of the system than the ones the insurance companies identify. Unfortunately, the government's proposals reveal that it intends to promote cost-reduction in terms that will further insurance companies' interests at the expense of Ontario's drivers.

Certainly, the premiums drivers pay represent an important part of how to calculate what our systems costs. But the costs to drivers must also be understood in terms of the value of the services they receive when they become the victim of an accident and, as a result, become dependent upon their insurance coverage to promote their recovery and rehabilitation.

In Ontario, far too many claimants find themselves in the unacceptable situation of having to fight their insurance companies for the benefits to which they are entitled. Those fights are costly. For example, insurers often send accident victims to independent medical examinations that are extremely expensive, time-consuming, and serve to either delay or deny claimants services and treatment.

The government's initiative to alter auto insurance is entitled "Putting Drivers First," which certainly sounds like the changes it is proposing are aimed at furthering Ontario drivers' interests. It emphasizes that its "digital first" approach is meant to modernize auto insurance services, and to introduce changes for the purposes of "reducing red tape," as well as furthering the aims of "lowering costs and fighting fraud." Again, those reassuring words describe goals that most people in Ontario would readily support. But, as the saying goes, "the devil is in the details." And the details as to how the government will accomplish its auto insurance reforms do not appear to be putting drivers first.

Currently, accident benefits ("AB") legislation governs the insurance coverage available to the victim of an automobile accident. When disputes between accident victims and insurers arise regarding the nature of their injuries and the scope of their AB coverage, the claimant has the opportunity to appeal the insurer's decision to the License Appeal Tribunal ("LAT"). In that proceeding, the victim may be represented by a lawyer. However, even in those cases in which the accident victim is successful at the LAT, there is no provision for the awarding of costs for reimbursement of legal fees.

We believe that changes to auto insurance ought to strengthen claimants' rights. There are various ways of achieving those goals that would result in reducing the system's costs by putting drivers first. Under the sweeping changes proposed, accident victims will continue to have the option to appeal their disputes with their insurers to the LAT. However, the proposed changes would take away claimants' rights to settle their cases. As a result, claimants would be denied the opportunity to have a lawyer representing their interests before the LAT.

The government's proposed changes, that would also do away with cash settlements and limit accident benefits to treatments, would place claimants in a highly vulnerable position. In reality, accident victims would find themselves being dependent upon the insurer to provide reasonable treatment promptly. At the same time, the limiting of the claimants' options would encourage insurance companies to deny claims—leaving accident victims with no adequate legal remedy to protect their interests. Such changes would represent an unacceptable denial of access to justice for accident victims.

In the name of streamlining services and improving efficiency, the government is moving towards narrowing accident victims' rights, limiting their access to justice, and making the process of accessing the services to which they are entitled more difficult. The direction of these reforms runs counter to our firm's experiences with accident victims and our understanding of how their needs are best served.

When accident victims come to our firm, they are often burdened and challenged by not only their medical problems, but also by significant worry and stress about their families, their finances, and the uncertainty of their futures. In recognition of that reality, we are proud of our team's demonstrated capacity to provide informed and compassionate service that upholds our firm's standard of proving full-circle care to all of our clients. Our understanding of the costs of the existing system leads us to conclude that accident victims' rights and needs must be given the consideration they deserve in order for auto insurance to serve Ontario drivers efficiently and fairly.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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