Ontario Auto Insurance Benefits

Effective June 1, 2016, the provincial insurance industry regulator, the Financial Services Commission of Ontario (FSCO), has introduced regulations to the Automobile Insurance System including lower accident benefit limits, new options to increase coverage, and new procedures for payment.

Some accident benefits have been reduced and some options previously available for increased coverage have been eliminated or changed.

Policies issued, or renewed, on or after June 1, 2016 will automatically be renewed at an accident benefit level that is deemed in keeping with the accident benefit option you previously had chosen. For example, if you have not previously increased your accident benefits, you will be renewed at the new lower standard accident benefit option. If you have increased your optional accident benefits, you will be renewed at the next most comparable option available using the new accident benefit choices (for the coverages that are changing).

Please check your renewal to ensure your new accident benefits coverage fits your needs. By now, you should have received an awareness mailer from your insurance company advising you of the regulatory changes.

It is important that you review your insurance policies yearly to ensure you have the right coverage for your current needs.

We have included a brief outline of the changes that come into effect June 1, 2016 below. The most significant changes to your policy are:

• Medical and Rehabilitation for non-catastrophic injuries:
  Current Policy - $50,000.
  New Policy - These benefits have been combined and reduced to $65,000 total.
  You can choose¹ - Increase the benefit to $130,000² total.
• Attendant Care for non-catastrophic injuries:
  Current Policy - $36,000.
  New Policy - These benefits have been combined and reduced to $65,000 total.
  You can choose¹ - Increase the benefit to $130,000² total.
• Medical and Rehabilitation for catastrophic injuries:
  Current Policy - $1,000,000.
  New Policy - These benefits have been combined and reduced to $1,000,000 total.
  You can choose¹ - An additional $1,000,000 for a total of $2,000,000² for catastrophic injuries.
• Attendant Care for catastrophic injuries:
  Current Policy - $1,000,000.
  New Policy - These benefits have been combined and reduced to $1,000,000 total.
  You can choose¹ - An additional $1,000,000 for a total of $2,000,000² for catastrophic injuries.
• Medical, Rehabilitation and Attendant Care, all injuries:
  Current Policy - Not applicable.
  New Policy - Not applicable.
  You can choose¹ - Increase the combined non-catastrophic benefit to $1,000,000 and the combined catastrophic benefit total to $2,000,000^2,3.

¹ If you have previously chosen to purchase these optional benefits check your policy – they may have changed to reflect amounts available in new options.

² Medical, Rehabilitation and Attendant Care benefits for minor injuries are fixed at a maximum limit of $3,500.

³ If you purchase both the additional Medical, Rehabilitation and Attendant Care benefit for catastrophic injuries and for all injuries, the total eligible benefit amount for a catastrophic impairment would be $3,000,000.

Other important changes to your policy:

• Minor Accident - Insurer can no longer use a minor at-fault accident meeting certain criteria4 to increase your premiums. This applies to accidents occurring on or after June 1, 2016.
• Interest Rate for Monthly Payment Plans - Maximum that can be charged for monthly premium payments has been lowered from 3% to 1.3% for one year policies, with corresponding reductions for shorter terms.
• Comprehensive Deductible - The standard deductible for Comprehensive coverage has been increased from $300 to $500.
• Non-Earner benefit - The six-month waiting period for people who are not working has been reduced to four weeks. Benefits can only be received for up to two years after the accident.
• Duration of Medical, Rehabilitation and Attendant Care benefits - For all claimants except children, duration of this standard benefit is now five years for non-catastrophic injuries, and will be paid only as long as you remain medically eligible.

Other Options⁵: The following chart lists some, but not all of the options available to purchase other additional or increased benefits and coverages. You can also choose not to increase any benefit or coverage.

• Income Replacement benefit:
  Current Policy - 70 per cent of gross income up to $400 per week.
  New Policy - No change
  You can choose - To increase the weekly limit to $600, $800 or $1,000 per week.
  
• Caregiver benefit:
  Current Policy - Available only for catastrophic injuries: Up to $250 per week for the first dependant plus $50 for each additional dependant.
  New Policy - No change
  You can choose - To make the same amounts available in current policy for catastrophic injuries available for all injuries.
• Housekeeping and Home Maintenance expenses:
  Current Policy - Available only for catastrophic injuries: Up to $100 per week.
  New Policy - No change
  You can choose - To make the same amounts available in current policy for catastrophic injuries available for all injuries.
  
• Death and Funeral benefits:
  Current Policy - $25,000 lump sum to an eligible spouse; $10,000 lump sum to each dependant; maximum $6,000 funeral benefits.
  New Policy - No change
  You can choose - $50,000 lump sum to an eligible spouse; $20,000 lump sum to each dependant; maximum $8,000 funeral benefits.
  
• Dependant Care benefit:
  Current Policy - Not provided.
  New Policy - Not provided.
  You can choose - Up to $75 per week for the first dependant and $25 per week for each additional dependant to a maximum of $150 per week.
• Indexation benefit:
  Current Policy - Not provided.
  New Policy - Not provided.
  You can choose - Annual adjustment for inflation for many benefits according to the Consumer Price Index for Canada.
• Third Party Liability:
  Current Policy - $200,000 minimum for claims as a result of lawsuits against you.
  New Policy - No change.
  You can choose - Options exist to increase the minimum amount.
• Tort Deductible:
  Current Policy - $36,905.40 deductible for court awarded compensation for pain and suffering (Jan 1-Dec 31, 2016).
  New Policy - No change.
  You can choose - Reduce deductible by $10,000 regardless of annual indexation percentage increases.

⁴ Criteria include no payment by any insurer, no injuries, and damages less than $2,000 are paid by the at-fault driver, and this provision is limited to one minor accident every three years.

⁵ If you have previously purchased any optional benefits please review your renewal documents as they may have changed.

Please contact our office for an explanation of your current coverage and/or to discuss the details of the regulatory changes and your options to make changes. For general information about auto insurance in Ontario and more about these changes, please visit www.fsco.gov.on.ca.