Most of us who drive cars should be aware of changes to auto insurance that became effective on June 1st of this year. Having said that, it would be a safe bet that not many have taken the trouble to look at the changes and to see how they affect us.
First of all, the cynical among us (yes I am one of them), think the changes were brought in by the Ontario Government under pressure from the auto insurance companies to reduce their costs. Some remember that the current Government promised in their campaign in the last election to reduce auto insurance premiums. The Government did not have the stomach to legislate lower premiums. However, they came up with another plan; to reduce costs for the insurance companies so that they could (hint hint) pass on some premium decreases to the unsuspecting and naive public. The only way the insurance company costs could be reduced was for the Government to reduce statutory accident insurance benefits. There did not appear to be any serious attempt by the Government to study the impact to determine if the previous benefits were too generous. The problem with this plan is that many of us are just too busy or non engaged to spend any time looking into the changes. I should make it clear that this has nothing to do with the potential claim (called a tort claim) that a person can make for a serious car accident which crossed the statutory "threshold" definition of "a permanent and serious impairment of an important bodily function that is physical, mental or psychological in nature". Back to the changes. They were brought in by the Government last summer by a Regulation (not legislation) without any public hearings or debate.
The primary changes are:
• for catastrophic injuries, the coverage for medical, rehabilitation and attendant care benefits was reduced from $2 million to $1 million (previously there was a $1 million for medical and rehabilitation benefits and an additional $1 million for attendant-care benefits). Thus, the changes have combined the two but reduced them by 50%
• for those who suffer less severe injuries, the previous maximum limits of $50,000 for medical and rehabilitation benefits and $36,000 for attendant-care, were combined but reduced to $65,000 (a $21,000 reduction)
• there is now a tougher criteria for the determination of catastrophic impairment. The changes are numerous but as one example, quadriplegics and paraplegics will no longer qualify for benefits unless their injuries satisfy certain criteria.
What should you do in light of these changes? I suggest you get in touch with your insurance broker, who can explain the changes and recommend the appropriate additional coverage be purchased in keeping with your needs. The good news is that the appropriate additional coverage can be purchased largely with the premium reductions.
Michael Cobb is a lawyer at the law firm of Cobb & Jones LLP. Should you have any questions for Ask A Lawyer, please direct them to the Simcoe Reformer or ask a lawyer of your choice. For more articles, visit the Library page at www.cobbjones.ca.