The Car Insurance and personal injury and accident benefits in Ontario are prescribed by the government, which should work with the direction of the public and the insurance companies to deliver a balanced formula of reasonable premiums and reasonable benefits. This Balance has been out of whack for some time now, and injured motorists and pedestrians are the ones suffering from the imbalance.
In Ontario car insurance is mandatory. Almost all Ontarians have the same policy that is bought from one of hundreds of insurers in the country. While there are a few ‘optional’ benefits like increased coverage for certain claims, almost all drivers carry the exact same policy. The benefits have been slowly eroded since the 1990s while the premiums and insurance company profits have been on a steady increase. In Ontario we pay 50% more than the national average for our policies.
The history of eroding benefits goes back to 1990 when the Ontario government passes a ‘no fault’ hybrid insurance regime which insured all drivers providing coverage for claims regardless of fault. This was intended to resolve the situation where car accident victims were forced to sure for benefits. These lawsuits cost insurers a lot.
In 1994 Bill 164 again moved us closer to a no fault style of insurance. It removed a victim’s right to sue for lost income, out of pocket expenses, or the cost of cares. It established a ‘deductible’ for pain and suffering damages in which the first $10,000 of pain and suffering awards went from the injured person’s pocket into that of the insurance company. In exchange the government created an accident benefits system that allowed the injured person to receive prescribed benefits from their own insurer.
In 1996 the complications of Bill 164 were acknowledged, and Bill 58 came into effect which allowed injured people to make claims for all damages including economic losses against the at-fault driver. A new $15,000 deductible was established for pain and suffering awards, and the money would go back to the insurer. Lost income was allowed up to 80% of net income. In exchange for the right to sue the government severely curtailed the accident benefits injured parties were entitle to. Many auto insurers complained that the cost of healthcare under this plan was too high.
In 2003 the law was again changed resulting in victims who claimed pain and suffering having to repay $30,000 to their insurers. This was done to increase insurance company profits and reduce costs.
In 2010 the government again made changes. This time they were major and included an overhaul of the statutory accident benefits. It established Minor Injuries which would have a maximum of $3500 in medical and rehab benefits. For those who suffered broken bones or neurological injuries a $50,000 cap was established. Housekeeping benefits were eliminated, and attendant care limits were cut in half. Catastrophically impaired victims faired the worst in this change. These changes were all justified by promising a reduction in the cost of premiums that was never achieved.
2015 saw yet another major change limiting the punishments that could be doled out to insurers who improperly denied claims. We have now found a system that encourages insurers to delay or deny payments of benefits as they cannot be punished for doing so.
2016 saw yet another reform which once again reduced accident benefits to satisfy the insurers cry that the system is too expensive. The changes drastically reduced medical benefits to individuals with serious injuries and created limits to the time they may be claimed. Benefits available to catastrophically impaired people were cut in half. For those who require 24 hour care the benefit money may well run out long before their life ends. The deducible for pain and suffering is now at $40,000 and it continues to rise for inflation. The benefits to injured people are not indexed to inflation. These changes again serve the insurers not the injured.
Find out where the parties stand in the upcoming provincial election. Ask your candidate about the state of car insurance in Ontario. Consider purchasing additional benefits for your car insurance policy so that you are better covered in the event of a serious accident.