Notwithstanding mandates that Ontario insurers reduce premiums by 15%, this has not happened. Instead effective the 1st of June, 2016 holders of auto policies in Ontario received notices that significant benefits were being taken away. The insurers have failed to reduce premiums and have taken away benefits which are now charged as optional benefits. These optional benefits will cost you something in the range of $200 and effectively increase your insurance premiums in the guise of reducing them and allowing optional benefits.
The whole process has been spun by the Insurance Bureau of Canada which states in describing these changes:
“Effective June 1, 2016, there will be changes to the Ontario Auto Insurance Product that will make your premium more affordable and give you more choice.”
Not much could be further from the truth.
Insurance policy holders are of course being ripped off. A recent report commissioned by the Ontario Trial Lawyers Association establishes that premiums have not gone down at all.
A examination of the benefits that have replaced the old ones will demonstrate the significant reductions in benefits being provided under the existing policies in Ontario.
- Medical/rehab benefits/attendant care:
Until the 1st of June, 2016 for minor and non-catastrophically injured victims the amount of attendant care was $36,000. Med/rehab benefits were $50,000. Effective June of 2016 these amounts were reduced to a combined total of $65,000. The time period for payment and eligibility has been reduced from 10 years to 5 years post motor vehicle accident. This has resulted in a $21,000 reduction in benefits payable only for half the period of time. This in itself should have provided the insurers with enough profit to reduce premiums but they haven’t. Of course the insurers have been quick to offer optional benefits that can be purchased to increase the benefits to $130,000 or $1,000,000 over five years. Having purchased these benefits they will increase your premium for your coverage by over $200 per year. This results in a net increase in insurance premiums rather than the 15% reductions mandated by the Provincial Government.
- Catastrophic Injuries
The most unfortunate changes resolve around catastrophic injuries. The amount of $1,000,000 for medical/rehabilitation benefits and $1,000,000 in attendant care available prior to June 1, 2016 has been reduced to $1,000,000 in total. The coverage has been cut in half for those who are most vulnerable. In addition, the definition of “catastrophic” has been significantly restricted and is more difficult to achieve.
The new definition of catastrophic removes the Glasgow Coma scale as a test to determine catastrophic entitlement. In addition, paraplegia, tetraplegia, amputation and vision loss have narrower definitions. These changes will have devastating repercussions to critically injured people who will be left with only $65,000. Obviously they will be forced under the public purse or family members for assistance.
Optional coverage can of course be purchased adding $1,000,000 for a total of $2,00,000 with a combined non-catastrophic benefit of $3,000,000. You would still however have difficulty with the criteria that has been redesigned to narrow the definition of catastrophic injury.
- Non-earner Benefit
Prior to 2016 the benefit had been paid after 6 months carried on for the balance of the working life expectancy of the injured person. Now the break period has been reduced to 4 weeks but it is only paid for 2 years which is a significant benefit to the insurer.