May 18, 2016
Motor Vehicle Insurance Regulation in Ontario
The Government’s Action
In the Canadian province of Ontario, significant changes in compulsory motor vehicle insurance provisions soon will save drivers some money but reduce the coverage they might receive on their claims for personal injuries, property damage, and losses from vehicular crashes. As of 1 June 2016, premium rates for basic coverage will decrease by an average of 3.7 percent, but insurers have sent out notices to their policy holders and advisories to consumers generally to study their market options for whether they should consider purchases of additional coverage that might protect them better from unnecessary loss.
Two experts who understand insurance coverage say spending a few dollars more per month for protection against catastrophic car crash costs would be a wise precaution. Both emphasize the need for more protection available for modestly increased premiums.
“There are too many car crash casualties, many if not most injured very severely,” they say, “and not enough funds at hand to pay recovery costs. Most drivers assume they never will be in a car crash because they’re good drivers who pay attention, but then it happens and they too are in trouble.” They say drivers should take a moment to reflect on what would happen to them if they suffered truly serious, perhaps disabling injuries.
The major change in coverage will be the reduced cap for catastrophic medical rehabilitation and attendant care from two to one million dollars, an amount that can run out all too soon if the claimant suffers an incapacitating injury or must operate from a wheelchair.
The Ontario Government has made several changes to basic motor vehicle insurance policies, every change decreasing the coverage available to car crash casualties and increasing their need for optional benefits. For a severe injury, the costs of treatment, care, and inability to work are often more than $2 million. Drivers may not be aware that third-party coverage reduces the driver’s personal liability and also applies family protection coverage if the driver or a family member is injured in a crash.
The Broker Response
The Insurance Brokers Association of Ontario (IBAO) has launched a public awareness campaign on the impending effects of Ontario motor vehicle insurance reform. The current changes effective 1 June 2016 are the latest of the Government of Ontario’s efforts to suppress what it says are widespread fraud and abuse.
The Fighting Fraud and Reducing Automobile Insurance Rates Act passed by the provincial government in 2014 lowered accident benefit caps in standard insurance policies and introduced new options for increased coverage, new premium payment procedures, and a mandatory winter tire premium discount across Ontario.
The IBAO believes it is important for drivers to understand that the Ontario motor vehicle insurance changes bring more consumer choice of services that can suit individual needs and budgets. The public awareness campaign includes broker training and education, brochure handouts, videos, and social media postings.
The IBAO urges brokers to remind clients that bare-bone standard policies don’t include dependent care but may include other unfortunate and unnecessary gaps in coverage. The way to fill such gaps is by increasing coverage or adding options for specific areas.
The IBAO offers its members free educational materials. An on-demand webinar, Ontario Auto 101, explains and summarizes the changes. A live IBAO webcast, a panel discussion among insurers, legal experts and insurance brokers, examines in depth implications the changes have for consumers.
Consult a Personal Injury Attorney
For more information or for help with an actual car crash case, contact the Michelle Linka Law Professional Corporation. Unnecessary delay has lost more than one case for compensation in Ontario. Call 416-477-7288 today to schedule a free consultation.