The Top 5 Changes to Your Car Insurance Policy You Need to Know About

Being involved in a car accident is complicated enough. As of June 1, 2016, there are significant changes that come into effect when it comes to the Statutory Accident Benefits Schedule (SABS), or what you may know as “accident benefits” or “no fault benefits”. You likely already received a letter from your insurance company informing you that your options for optional benefits have changed and if you want to upgrade your policy, you needed to do so before June 1, 2016 (or before your policy renews, if it renews after that date). You can find out the details of the changes on the Financial Services Commission of Ontario (FSCO) website.

This is why it is always helpful to speak with a lawyer after you have been in a car accident as a lawyer can help you navigate the process.

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The most significant changes to your benefits that you should be aware of are: (information source: FSCO’s website)

Medical and Rehabilitation Benefits & Attendant Care for Non-Catastrophic Injuries

(This is the category of injuries between “Minor Injury Guideline (MIG)” (where a maximum of $3,500 in Medical and Rehabilitation benefits are paid and no Attendant Care is available) and Catastrophic Injury”)

• After June 1, 2016, under a standard policy, the amount for Medical and Rehabilitation coverage for non-catastrophic injuries has been combined with the amount for Attendant Care coverage for non-catastrophic injuries for a reduced and combined total of $65,000. Previously, the standard policy limits were $50,000 for Medical and Rehabilitation and $36,000 for Attendant Care.
• If you purchase optional benefits, the combined amount is $130,000 for both categories. Previously, optional benefits provided you with $100,000 for Medical and Rehabilitation and $72,000 for Attendant Care.
• There is also an optional benefit option to purchase $1,000,000 of coverage for Medical, Rehabilitation and Attendant Care for all injuries (non-catastrophic and catastrophic) which remains the same. If you previously purchased this benefit, you will continue to have it on your new policy.

Catastrophic Injuries

• After June 1, 2016, under a standard policy, the benefits have been combined and reduced to $1,000,000 total. Previously, a person with catastrophic impairments had access to $1,000,000 for Medical and Rehabilitation and $1,000,000 for Attendant Care.
• If you purchase optional benefits, you can purchase an additional $1,000,000 of coverage for combined Medical, Rehabilitation and Attendant Care, for a total of $2,000,000.
• In addition, if you previously purchased/or choose to purchase the $1,000,000 Medical, Rehabilitation and Attendant Care benefit for all injuries, you can combine these benefits for a total of $3,000,000 coverage.

Duration of Time Benefits Are Paid

• Benefits are now paid for a maximum of 5 years for adults with non-catastrophic injuries (previously 10 years), as long as a person remains medically eligible. 
• For children 18 and younger, benefits are paid until age 28, as long as a person remains medically eligible.

Non-Earner Benefit

• The waiting period to receive a Non-Earner Benefit has now been reduced from 26 weeks to 4 weeks, however, the duration has been reduced to 2 years.
• The benefit amount has also changed in that before June 1, 2016, a person receiving a Non-Earner Benefit would receive $185.00 per week for a period of up to 2 years following the accident if medically eligible, and if after the 2 years, they continued to be medically eligible, they received an increased amount of $320.00 per week.

Other Changes To Be Aware Of

• Insurers are no longer able to use a minor, at-fault accident that occurs on or after June 1, 2016 (that meets certain criteria) to increase your premiums. This is limited to one minor accident every three years.
• The maximum interest rate that insurers can charge if you make monthly premium payments has been lowered from 3% to 1.3% for 1 year policies and there are corresponding reductions for shorter terms.
• The standard deductible for comprehensive coverage has been increased from $300 to $500.

Some Other Important Benefits You Can Purchase

• Under a standard automobile insurance policy, someone who was working at the time of an accident and is medically eligible for Income Replacement Benefits is eligible at the rate of $70% of gross weekly income, up to a maximum of $400 per week. Optional benefits allow a person to increase the weekly limit to $600, $800 or $1,000 per week.
• A Caregiver Benefit is only available to persons who have suffered a catastrophic injury, but optional benefits would allow you to extend this benefit to all injuries.
• Housekeeping and Home Maintenance expenses are only payable for catastrophic injuries, but you can purchase optional benefits to extend the benefit to all injuries.
• You can increase the minimum amount of Third Party Liability coverage you have from $200,000 to $1,000,000 or $2,000,000 or more. This is insurance coverage for claims that can occur as a result of lawsuits against you. This is important to consider, because if a person does not have enough Third Party Liability coverage, the plaintiff (injured person) in a lawsuit can pursue the person at fault’s assets/wages.
• You can reduce the tort deductible (amount deducted from a settlement/court award for pain and suffering) by $10,000 regardless of the annual indexation percentage increases. Currently the tort deductible is $36,905.40.

According to a poll conducted on behalf of the Insurance Brokers Association of Ontario, 42% of Ontarians are aware of the upcoming automobile insurance changes.

As an Ontario driver, it is important to know what your options are when it comes to your insurance policy. As a pedestrian, passenger or cyclist, it is also important to be aware of these changes.

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Being involved in a car accident is stressful and one can sustain serious injuries. It is important to contact a lawyer as soon as possible so you can be advised of your rights and obligations as an insured/injured person. The lawyers at Aaron Waxman and Associates have helped many clients who have been injured as a result of car accidents.