The winds of change aren’t just blowing for car insurance in Ontario. They’re howling! Over the past 8 months, Ontario’s government has announced a major overhaul to how personal injury disputes arising from the use or operation of a motor vehicle are dealt with.
Why is this important to you?
For starters, if you drive a car, or a passenger in a car and sustain any sort of injury, then these changes will impact you. Secondly, it’s the LAW if you drive a car or motorcycle to have insurance. If you drive a motorized vehicle without insurance, then you’re breaking the law and you don’t want to do that. Because car insurance is a requirement, then it ought to be GOOD, and not a hollow policy.
In Ontario, we have a no fault system of accident benefits. These accident benefits are there to protect policy holders, like you and me. The intent of the accident benefit system and the surrounding legislation is CONSUMER PROTECTION LEGISLATION. We are getting away from that “Consumer Protection” part as each day goes by.
Here are some of the highlights from the drastic changes which will kick in effective April 1, 2016 and June 1, 2016:
1. Effective April 1, 2016, you will NO LONGER BE ABLE TO SUE YOUR OWN CAR INSURANCE COMPANY in Court! Under the existing system, if an insurer denies your claim for benefits, you begin the process via Application for Mediation at the Financial Services Commission of Ontario (FSCO). If the mediation fails, then the claimant has the option of either applying for Arbitration at FSCO, or starting a lawsuit by way of Civil Action. That option to take one’s dispute to Court has been eliminated. I love it when the government tells you that you can’t pursue your rights in open Court…. I thought we were living in a democratic and just society….
2. NO MORE FSCO MEDIATIONS! For the past 25 years of so, civil servants with knowledge in mediating car accident disputes have been hard at work at the Financial Services Commission of Ontario mediating and arbitrating accident benefit claims. It was all they did. They understood the legislation. They understood how car accident claims worked. They understood the dynamic between large insurers and accident victims. They had 25+ years of experienced doing this sort of thing. And with the blink of an eye, this system is no more. All car accident disputes are being transferred to the License Appeals Tribunal or LAT. It’s the equivalent of saying we are cleaning house with the judicial system, and transferring all cases over to a different Court, with a completely different set of decision makers. These new decision makers will not only be responsible for car accident claims. They will also have to resolve disputes in a hodge podge of different areas, including but not limited to disputes under the (queue the Benny Hill Music) :
Bailiffs Act
Building Code Act, 1992
Collection and Debt Settlement Services Act
Consumer Protection Act, 2002
Consumer Reporting Act
Discriminatory Business Practices Act
Film Classification Act, 2005
Funeral, Burial and Cremation Services Act, 2002
Gaming Control Act, 1992
Liquor Control Act
Liquor Licence Act
Motor Vehicle Dealers Act, 2002
Ontario New Home Warranties Plan Act
Paperback and Periodical Distributors Act
Payday Loans Act, 2008
Private Career Colleges Act, 2005
Private Security and Investigative Services Act, 2005
Real Estate and Business Brokers Act, 2002
Travel Industry Act, 2002
Upholstered and Stuffed Articles Act
Vintners Quality Alliance Act, 199
This is not an April Fools Joke. The LAT is the melting pot for disputes where car accident claims are being sent. I imagine that many of the FSCO mediators will be joining the LAT to bring their knowledge where it’s needed. Or not…..We will see how things work out.
3. Effective June 1, 2016, the maximum accident benefits available for non-catastrophic accident claims has been reduced from the current total maximum of $86,000; down to a combined total of just $65,000. This is about a 24% reduction in available benefits. Have your premiums been reduced by 24% over the past 5 years? Then why should your benefits be reduced by 24%? This makes no sense.
4. Effective June 1, 2016 the duration for receiving/claiming accident benefits has been shortened from 10 years down to 5 years!
5. Effective June 1, 2016, the non earner benefit, which is currently payable over the duration of one’s life, has been capped to a maximum duration of just 2 years.
6. The deductible for tort claims (pain & suffering) vs. the at fault driver has increased from $30,000 up to $36,450. That means if you go to trial, and a Judge and Jury award you $40,000; then the first $36,450 vanishes! You are left with $40,000-$36,450 = $3,550. If a Judge awards you $35,000 at trial, then after the application of the deductible, you be left with ZERO for your case. Effective January 1, 2016, the deductible will be adjusted in annually with inflation. That means that this $36,450 figure is just going to to UP UP UP. In contrast, the standard income replacement benefit an insurer is legislated to pay has been at $400/week for a very long time (over 15 years). That figure has NOT been adjusted to reflect inflation. It seems that the only figures which are adjusted to affect inflation are those figures which favour large, deep pocketed insurers and not accident victims. This again goes against the notion that accident benefits are consumer protection legislation. If insurers didn’t want to insure Ontarians, then just say so.
7. Revised definition of Catastrophic Impairment: The government has insisted on changing the definition of disability for catastrophic accident victims to make it even MORE DIFFICULT to be found CAT, because this is what the people have screamed out to their local politicians to do. The new definition will apply to claims after June 1, 2016 and will completely eliminate the use of the Glasgow Coma Scale (GCS) which has been used across Ontario for the past 20 or so years. There used to be a simple GCS test for CAT benefits. That simple test has been eliminated. Now, if you want to be found CAT, you will need to pony up around $15,000-$25,000 or so for a good CAT report from a neuropsychologist and their team of assessors.
8. Reduction of Catastrophic Benefits: I have NEVER MET A SINGLE PERSON, who has insisted that catastrophically injured accident victims need to get less compensation or available treatment from their accident benefit claim. But this is what’s happening effective June 1, 2016 for car accident claims. For the past 20 years or so, the most seriously injured accident victims were entitled to $2,000,000 in accident benefits. That max limit is dropping in half to just $1,000,000. Why? Good question. Have you seen your premiums fall by half? Probably not. Then why should your benefits. Then ask yourself: When was the last time you saw people petitioning their local MPP to reduced and lower accident victims? I’ve NEVER seen it. This is just an example of a government doing whatever insurers want them to do. Make no mistake about it; these drastic changes are being brought by the request of large insurers, not the electorate.