As of June 1st, 2016, auto insurance in Ontario is going to undergo a change, with major revisions to no-fault benefits (statutory accident benefits). Announced on August 31, 2015, the new Statutory Benefits Schedule will be implemented for each driver upon the renewal of their policy after June 1st. But what does this mean to you as a driver, and how will it affect you?
These new revisions to the Statutory Accident Benefits Schedule drastically reduce benefits. One of the more severe examples of the cuts is to the non-earner benefit. This benefit was available to a non-earner after a 6 month initial waiting period but was payable for so long as a complete inability to carry on a normal life was demonstrated. Now – while this weekly benefit becomes payable after a four week waiting period – it will be paid for only a two-year maximum.
Other statutory benefits for medical care, rehabilitation, and attendant care have all also been reduced. For non-catastrophic impairments from car accidents, what was once a basic medical care and rehabilitation benefit of $50,000 and an attendant care benefit of $36,000 – a combined total of $86,000 – will be combined into a single benefit covering all three expenses of $65,000, a reduction of $21,000. As well, the time during which these benefits are paid has been halved from ten years to five. Additionally, for the most severely injured and found to be catastrophically impaired, the total benefits available for medical care, rehabilitation and attendant care – which are currently covered by two benefits at $1,000,000 per benefit, for a total of $2,000,000 – will be reduced to a single combined benefit of $1,000,000. This halves the coverage that those suffering catastrophic injuries will receive.
The current system has a second optional medical care and rehabilitation benefit of $100,000, along with an optional attendant care benefit of $72,000 – both of which will be eliminated and replaced with a combined benefit of $130,000, a reduction of $42,000. This means that all three levels of coverage for medical care and rehabilitation expenses, from basic statutory benefits to the largest optional benefits, will see major reductions.
Your insurer is going to have more power to deny miscellaneous goods and services that were previously payable provided that your healthcare practitioner determined you required them and they were reasonable. The new regulations change this such that your insurance company now must agree that the expenses are required for your recovery or rehabilitation, in addition to being reasonable and necessary.
The deductibles will also be increasing – the current standard deductible for comprehensive coverage of $300 will increase on June 1st to $500. In exchange for this, as of June 1st, insurance providers will no longer be allowed to take minor accidents – defined as involving less than $2,000 damage with the costs paid by the at-fault party (and not by any insurance company) and no personal injuries – into account when calculating premiums. The exception to this, however, will be if you have had more than one at-fault minor accident in the last three years. In that case, your insurance company is permitted to consider a minor accident after June 1, 2016, in calculating your rate or renewing your policy.
The new changes obviously benefit the insurance companies far more than consumers. It is crucial that you find out what optional coverages you need by talking to your broker or insurance company when your policy renews to make sure you have adequate coverage. No one ever expects to be injured in a car crash- but best to make sure that if this happens, you will be fully covered.
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.
