Insurance Basics: Personal Insurance
Providing More Choice to Consumers:
What You Need to Know About Changes to Auto Insurance in Ontario: The Details
The Ontario government is introducing reforms to the auto insurance system, in order to provide consumers more choice over the coverages and price they pay for insurance. These additional accident benefit choices will allow you to customize your policy to suit your needs. These measures are aimed at reducing fraud and abuse of the system, which increase premium.
Standard Auto Insurance Policy
In Ontario, the Insurance Act determines the standard coverage that consumers must purchase. As a result of the reforms, some of the features under the Standard Auto Insurance Policy have changed. Beginning June 1, 2016, if you are either buying a new auto insurance policy or renewing an existing one, you will have more options to purchase a level of coverage that is right for you.
By law, all auto insurance policies at minimum must include:
- Third-Party Liability
- Accident Benefits
- Direct Compensation-Property Damage
- Uninsured Automobile coverage
Beginning June 1, 2016, if you are buying a new policy or renewing an existing one, you have the following options with respect to Accident Benefits (also see the Auto Reform Coverage Summary Page):
Accident Benefits Coverage
|Prior Coverage||Coverage as of June 2016||Options Available|
|Medical, Rehabilitation and Attendant Care Benefits
|Medical and Rehabilitation:
Reimbursement for reasonable, necessary medical and rehabilitation expenses like physiotherapy not covered by OHIP or Group Insurance Plans.
Reimbursement for an attendant to look after you either at home or within a healthcare facility.
Minor injuries (sprains, whiplash) + Serious injuries (broken bones, severe strains).
Loss of limb, para/quadraplegia.
$50,000 for Medical and Rehabilitation
$36,000 for Attendant Care
$1,000,000 for Medical and Rehabilitation
$1,000,000 for Attendant Care
$65,000 total for Medical, Rehabilitation and Attendant Care
$1,000,000 total for Medical, Rehabilitation and Attendent Care.
Increase to $130,000 for Medical, Rehabilitation and Attendant Care
Increase to $2,000,000 total for Medical, Rehabilitation and Attendant Care
Increase non-catastrophic injuries to $1,000,000 and $2,000,000 for catastrophic injuries for Medical, Rehabilitation and Attendant Care to total of $3,000,000.
|Caregiver Benefit||Reimbursement to hire someone to care for your dependents||Up to $250/week for the first dependent, $50/week for additional dependant; (Catastrophic injuries only)||No Change||Extend benefit to cover serious and minor injuries (not just Catastrophic)|
|Housekeeping and Home Maintenance Expenses||Reimbursement to hire someone to care for your dependents||Up to $100/week, available only for catastrophic injuries.||No Change||Extend benefit to cover Serious and Minor injuries (not just Catastrophic)|
|Income Replacement Benefit||Reimbursement for someone to carry out household responsibilities||70 % of gross income up to $400 per week.||No Change||Can be increased to $600, $800 or $1000 per week.|
|Dependent Care Benefit||Reimbursement for additional expenses to care for your dependents if you’re employed and injured from a car accident||Not provided.||No Change||Can purchase up to $75/week for first dependant and $25/week for each additional dependant to a maximum of $150/week.|
|Death and Funeral Benefits||A lump sum payout to your spouse and dependent(s); a second lump sum payout to cover the cost of funeral expenses.||$25,000 lump sum to an eligible spouse; $10,000 lump sum to each dependant;
Up to $6,000 for Funeral.
|No Change||Can increase to $50,000 lump sum to an eligible spouse; $20,000 lump sum for each dependant;
Can increase to $8,000 for Funeral
|Indexation Benefit||Adjustment of benefits to account for changes in inflation.||Not provided.||No Change||Annual adjustment according to the Consumer Price Index for Canada.|
|Tort Deductible||The amount deducted from a settlement or court award for pain and suffering||$36,500 deductible||No Change||Reduce deductible by $10,000 regardless of annual indexation|
You Also Have New Choices to Customize Your Deductibles – The Portion of a Loss That You Are Required to Pay.
Tort Deductible – You have the option to reduce the deductible associated with court awarded compensation for pain and suffering by $10,000 from $36,500.
What Else is New?
The government’s reforms lay the foundation for an auto insurance system with greater price stability and more customized coverage best-suited to your lifestyle. Other key changes include:
- Minor Accident – Insurers can no longer use a minor at-fault accident that occurs on or after June 1, 2016 meeting certain criteria to increase your premiums. The criteria include that no payment has been made by any insurer, that there are no injuries, and that damages to each car and property were less than $2,000 per car and were paid by the at-fault driver. This provision is limited to one minor accident every three years.
- Interest Rate for Monthly Payment Plans – The maximum interest rate that insurers can charge if you make 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 to receive benefits has been reduced to four weeks. Benefits can now only be received for up to two years after the accident.
- Duration of Medical, Rehabilitation and Attendant Care benefits – For all claimants except children, the amount of time that you can receive this standard benefit is now five years for non-catastrophic injuries, and it will be paid only as long as you remain medically eligible.
What do the Coverages Mean?
Injured in a Motor Vehicle Accident?
- A number of rules governing accident benefit claims change June 1, 2016. For updates on these changes, please contact your insurance company.
- 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 you have selected.
For more information on your coverage choices, or to modify your policy, contact your Rhodes & Williams Insurance Broker representative:
Rhodes & Williams Insurance Brokers
1050 Morrison Drive
For general information about changes to auto insurance in Ontario, contact:
Financial Services Commission of Ontario
TTY (416) 590-7108
Consumer Information Centre
Telephone (416) 362-9528
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