Changes
The Insurance Act in Ontario defines the benefit amounts that are required
in all standard auto insurance policies
sold in the province of Ontario. However effective September 1, 2010
the Ontario government will introduce auto reform that will introduce new
choices for policy holders to customize their Accident Benefits
coverage.
Current
automobile policy holders coverage will remain unchanged until their
next renewal date. Four to six weeks prior to their renewal date they
will receive a renewal package directly from their insurer which will out
line further the changes and the various coverage options available.
If a policy
holder chooses they may make changes to their insurance coverage prior to
its renewal date to take advantage of the new legislated changes after
September 1, 2010.
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Why?
Why were the auto
reforms necessary? Injury claims cost have risen dramatically over the
past few years. Particularly the cost associated with minor injuries which
make up the majority of injuries related to car accidents. These include
strains, sprains, whiplash, cuts and alike. In particular it has been the
cost of managing these injures that has been skyrocketing. Currently, for
every dollar spent on treatment, another 60 cents is spent on assessments.
In order to control these cost and to stabilized rates the government has
implemented these changes.
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Statutory
Accident Benefits Schedule
The following chart is a comparison of the standard
Statutory Accident Benefits which were available through the old legislation
as compared to the new legislation. It also outlines the new optional
increases.
|
Coverage |
Coverage under
your existing auto insurance policy
|
Coverage under
New Standard Auto Insurance Policy
|
Options
available to increase your benefits
|
|
Medical,
Rehabilitation and Attendant Care benefits
-for
non-catastrophic injuries |
$100,000 for
medical and rehabilitation benefits; $72,000 for attendant care
benefits. |
$50,000 for
medical and rehabilitation benefits, including assessment costs;
$36,000 for attendant care benefits. |
$100,000 or
$1,100,000 for medical and rehabilitation benefits including
assessment costs; $72,000 or $1,072,000 for attendant care benefits. |
|
Medical,
Rehabilitation and Attendant Care benefits
-for
catastrophic injuries |
$1,000,000 for
medical and rehabilitation benefits; $1,000,000 for attendant care
benefits. |
$1,000,000 for
medical and rehabilitation benefits including assessment costs;
$1,000,000 for attendant care benefits. |
An additional
$1,000,000 for medical, rehabilitation and attendant care benefits
including assessment costs. |
|
Caregiver
Benefit |
Up to $250 per
week for the first dependant plus $50 for each additional dependant;
available for all injuries |
Up to $250 per
week for the first dependant plus $50 for each additional dependant;
available only for catastrophic injuries. |
Up to $100 per
week, available for all injuries |
|
Housekeeping and
Home Maintenance expenses |
Up to $100 per
week, available for all injuries. |
Up to $100 per
week, available only for catastrophic injuries. |
Up to $100 per
week, available for all injuries. |
|
Income
Replacement benefit |
80 per cent of
net income up to $400 per week. |
70 per cent of
gross income up to $400 per week. |
Weekly limit can
be increased to $600, $800 or $1,000 per week. |
|
Dependant Care
benefit |
Not provided. |
Not provided. |
Up to $75 per
week for the first dependant and $25 per week for each additional
dependant to a maximum of $150 per week. |
|
Death and
Funeral benefits |
$25,000 lump sum
to an eligible spouse; $10,000 lump sum to each dependant; maximum
$6,000 funeral benefits. |
$25,000 lump sum
to an eligible spouse; $10,000 lump sum to each dependant; maximum
$6,000 funeral benefits. |
$50,000 lump sum
to an eligible spouse; $20,000 lump sum to each dependant; maximum
$8,000 for funeral benefits |
|
Indexation
benefit – applicable to income replacement benefit, non-earner
benefit, caregiver benefit, attendant care benefit or medical and
rehabilitation benefit. |
Not provided. |
Not Provided. |
Annual
adjustment according to the
Consumer Price
Index for Canada. |
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Ontario Regulation 34/10
The new
Statutory Accident Benefits Schedule also
includes the following changes:
-
Capping medical/rehabilitation and
assessment/examination expenses for minor injuries
to $3,500.
-
Replacing the existing Pre-Approved Framework
Guideline for Grade I and II Whiplash Associated
Disorders with a new Minor Injury Guideline for
accidents occurring on or after September 1, 2010.
-
Providing standard medical and rehabilitation
coverage for non-catastrophic claims of $50,000,
with optional coverage of $100,000 or $1,100,000.
-
Offering standard attendant care coverage for
non-catastrophic claims of $36,000, with optional
coverage of $72,000 or $1,072,000.
-
Supplying optional caregiver, housekeeping and home
maintenance benefits for non-catastrophic claimants.
-
Capping each assessment to $2,000 – this applies for
all assessments, whether they are requested by the
claimant or insurer.
-
Providing payment for in-home assessments only to
claimants who have sustained more than a minor
injury.
-
Eliminating rebuttal examinations.
-
Offering $2,500 for accounting reports to support
income replacement benefits claims.
-
Merging treatment plans and applications for
approval of assessments or examinations into one
process.
-
Providing adjusters with discretion in the use of
insurer examinations.
-
Creating a definition for "incurred expense".
-
Simplifying and consolidating the rules that govern
claims processing.
-
Eliminating a number of approved forms.
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Renewing and
Existing Policies.
If you currently have an existing auto insurance policy you do not have to
do anything. The existing accident benefit limits
will continue to apply until your policy comes up for renewal, even if you
make a change to your policy, such as adding or removing a vehicle. However,
if you wish you may switch to the new accident benefit amounts
any time after September 1, 2010 .
Approximately
four to six weeks prior to your renewal date, your insurer will send you a
package that contains all of the information necessary for you to make an
informed decision on the type of insurance coverage that best suits your
needs.
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How
will these change affect me If I have to make a claim
For
claims occurring after September 1st, the current policy limits
remain in force, however the new claim will be subject to new procedures as
outlined in the legislation and will also be subject to the new minor injury
cap of $3,500.
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Will my rates go down
as a result of the changes?
The majority of policy holders will not see a decrease in their auto
insurance premiums as a result of the reform. Most insurance companies
have taken one or two rate increases over the past year which will be
reflected in the policy renewal. The new reforms will help to stabilized the
rates and slow down the increasing rate escalations.
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What else is new?
The government's reforms lay the foundation for an auto
insurance system with greater price stability, and more protection for you,
the consumer. Other key changes include:
- Many injuries received
in an auto accident are minor. If you have a minor injury due to
an auto accident, your medical and rehabilitation accident benefits are
limited to $3,500 regardless of the coverage level that you have
selected.
- Accidents where you are
25 per cent or less at-fault will no longer affect your premium.
- The deductible that is
applied to court awards for fatal accidents has been eliminated.
- A new requirement that
insurance companies send out benefit statements to their claimants,
advising how much has been paid to date, and the additional amounts
remaining for medical, rehabilitation and attendant care benefits.
- If your auto has been
damaged or written off after an accident and you don't agree with the
value you have been offered or your degree of fault for the accident,
you can choose the appraisal process outlined in the Ontario Auto Policy
to settle the dispute, and the insurer must agree to participate.
- Coverage is extended to
rented autos with a Gross Vehicle Rating (GVWR) of more than 4,500
kilograms, if it is for personal use and rented up to 7 days.
- Prohibiting use of
credit scores in giving quotations for your auto insurance rates.
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Where can I get more Information:
Financial Services Commission of Ontario
Insurance Bureau of Canada Consumer Information
Centre
http://www.understandingmyinsurance.ca/
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