Important Changes to Auto Insurance in Ontario Coming in 2010

Important Changes to Auto Insurance in Ontario, Effective September 1, 2010

The Ministry of Finance released new Regulations for Auto Insurance on March 2, 2010.  Regulation 34/10[1] will come into effect on September 1, 2010, and will affect the accident benefits insurance system.  In addition, amendments to the Insurance Act will be made, also effective September 1, 2010, to reflect changes to the tort insurance system. 

Changes to Tort Deductibles

These changes will be introduced as an amendment to the Insurance Act, and are not part of the Regulations.  The changes to the deductibles in the tort system will be as follows:

Wrongful Death Deductible

·         $15,000 deductible for the death of a loved one will be eliminated.

General Damages Awards

·         $30,000 deductible for pain and suffering awards may be reduced to $20,000, but only if the insured person purchases the optional endorsement.

Family Law Act Damage Awards

·         $15,000 deductible for the loss of care, guidance and companionship awards (FLA) may be reduced to $10,000 if the insured person purchases the optional endorsement.

Changes to Accident Benefits

Regulation 34/10 come into effect on September 1, 2010.  The changes are extensive and significant:

“Minor Injuries” Cap Established

Claimants who sustain an impairment that is “predominantly a minor injury” will have access to medical and rehabilitation benefits up to $3,500 only.  This amount will include assessment costs.  Anyone who is deemed to have suffered a minor injury is not entitled to attendant care benefits or housekeeping or caregiver benefits.  The $3,500 cap will not apply to a person if their health care practitioner determines and “provides compelling evidence” that the insured person has a pre-existing medical condition that will prevent them achieving maximal recovery from the minor injury.  A Minor Injury Guideline will establish a treatment framework for goods and services provided to those with “minor injuries”. 

Section 3 of the Regulation defines the following terms:

“minor injury” means a sprain, strain, whiplash associated disorder, contusion, abrasion, laceration or subluxation and any clinically associated sequelae;

“sprain” means an injury to one or more tendons or ligaments or to one or more of each, including a partial but not a complete tear;

“strain” means an injury to one or more muscles, including a partial but not a complete tear;

“subluxation” means a partial but not a complete dislocation of a joint;

“whiplash associated disorder” means a whiplash injury that,

(a) does not exhibit objective, demonstrable, definable and clinically relevant neurological signs, and

(b) does not exhibit a fracture in or dislocation of the spine;

Medical and Rehabilitation Benefits

·         Reduction from $100,000 to $50,000 for non-catastrophic claims, with an option to purchase increased coverage at an additional premium. 

·         All fees and expenses associated with assessments and reports in connection with accident benefits (excluding income replacement benefits) will be included in the $50,000 amount and will be applicable to the $1,000,000 available to catastrophic claimants.  The insurer assessments will not reduce the capped amount.

Caregiver and Housekeeping Benefits

·         For all non-catastrophic cases, housekeeping and caregiver benefits will be eliminated in the basic policy, and made optional with the payment of an additional premium.

·         For catastrophic cases, housekeeping benefits will only be available if they are “incurred” and there is a “substantial inability” to perform the housekeeping and home maintenance services normally performed before the accident.

Attendant Care Benefits

·         Reduction from $72,000 to $36,000 for non-catastrophic claimants, unless the insured purchases additional coverage. 

·         Payment will only be made when the benefit is “incurred”. 

Income Replacement Benefits

·         Will now be calculated based on 70% of gross income, rather than 80% of net income.  The maximum payable will remain at $400 per week, with the option of buying additional coverage of $600, $800, or $1000 per week. 

·         A limit of $2,500 is introduced for any accounting reports generated to determine entitlement.

Assessments

·         All assessment costs will be capped at $2,000.00 per assessment, whether at the instance of the insurer or the insured.

·         Payment for rebuttal examinations will be eliminated.

·         In-home assessments will be restricted to those who have sustained an impairment that is not a minor injury.

Definition of “catastrophic impairment”

·         The definition will be amended to include single limb amputees.

“Incurred Expense”

·         The claimant will need to establish that the benefit for attendant care, caregiver or housekeeping was “incurred”, which includes the following:

(i) the insured person has received the goods or services to which the expense relates,

(ii) the insured person has paid the expense, has promised to pay the expense or is otherwise legally obligated to pay the expense, and

(iii) the person who provided the goods or services,

(A) did so in the course of his or her regular occupation or profession, or

(B) sustained an economic loss as a result of providing the goods or services to the insured person;

Where, however, the insurer delayed or unreasonably withholds the benefit and entitlement is later determined by a Court or Arbitrator, the expense may be deemed to have been incurred.