Ontario Auto Insurance Reform
Important: Auto insurance in Ontario is changing, providing you with more choice over the coverages you select and the price you pay. Review a summary of changes and options available in the Point of Sale Disclosure document here.
What you need to know
Effective June 1, 2016, the Ontario government is making further changes to auto insurance offerings. These changes are intended to provide consumers with more flexibility to choose the right coverage for their needs and more control over what they pay. Over time, this should help stabilize insurance costs and premiums. Many of the changes in the reform affect Statutory accident benefits. Statutory accident benefits are mandatory benefits you are entitled to receive if you are injured in an auto accident, regardless of who was at fault.
Existing/Renewing Policies
If you currently have an existing auto insurance policy you do not have to do anything prior to renewal. The changes will be reflected in your renewal documents between June 1, 2016 and May 31, 2017. When you receive your renewal package, approximately 45 days before your renewal date, please review the details closely. If you would like to make any changes or have any questions about your renewal, please give us a call.
New Policies
If your new auto insurance policy has an effective date on or after June 1, 2016, the new Statutory Accident Benefits amounts will apply. This is a good opportunity for you to review your policy to ensure you have the right coverage for your insurance needs.
Claims
We will review your policy coverage that you had in place at the time of an accident and confirm your coverage and entitlement to benefits.
Most significant changes
The main changes effective June 1, 2016 are a reduction of Statutory Accident Benefits limits as well as the elimination of old and introduction of Additional Optional Accident Benefits. Statutory Accident Benefits are benefits you are entitled to receive if you are injured in an auto accident, regardless of who was at fault.
Whether you are buying a new policy or renewing an existing one, you should be aware of these changes.
For Non-Catastrophic Injuries
(e.g. temporary impairment, broken bones)
Accident Benefits |
Statutory Limit before June 1, 2016 |
Statutory Limit as of June 1, 2016 |
Change |
|---|---|---|---|
Medical and Rehabilitation |
$50,000 |
Combined and reduced to $65,000 total |
Lower combined limit ($65,000 vs. $86,000) |
Attendant Care |
$36,000 |
For Catastrophic Injuries
(e.g. permanent impairment, brain injury, paralysis)
Accident Benefits |
Statutory Limit before June 1, 2016 |
Statutory Limit as of June 1, 2016 |
Change |
|---|---|---|---|
Medical and Rehabilitation |
$50,000 |
Combined and reduced to $1,000,000 total |
Lower combined limit ($1,000,000 vs. $2,000,000) |
Attendant Care |
$1,000,000 |
Additional Protection choices are available for Increased Accident Benefits. The following New Benefits may be purchased:
- $130,000 Medical Rehabilitation & Attendant Care Coverage
- $1,000,000 Medical Rehabilitation & Attendant Care Coverage
- $1,000,000 Optional Catastrophic Impairment Coverage
Coverage available for these options is outlined in the following tables.
Total Coverage available for Non-Catastrophic injuries
|
If you purchase… |
You will have… |
|
|---|---|---|---|
From Base Policy |
From Optional Benefit |
||
Statutory Accident Benefits |
No Options - Medical Rehabilitation & Attendant Care Coverage |
$65,000 |
N/A |
Optional Accident Benefits available |
Increased Medical Rehabilitation & Attendant Care Coverage $130,000 |
N/A |
$130,000 |
Increased Medical Rehabilitation & Attendant Care Coverage $1,000,000 |
N/A |
$1 million |
|
Increased Optional Catastrophic Impairment Coverage $1,000,000 |
$65,000 |
N/A |
|
Combinations of Optional Accident Benefits available |
Increased Medical Rehabilitation & Attendant Care Coverage $130,000 PLUS Increased Optional Catastrophic Impairment Coverage $1,000,000 |
N/A |
$130,000 |
Increased Medical Rehabilitation & Attendant Care Coverage $1,000,000 PLUS Increased Optional Catastrophic Impairment Coverage $1,000,000 |
N/A |
$1 million |
Total Coverage available for Catastrophic injuries
|
If you purchase… |
You will have… |
|
|---|---|---|---|
From Base Policy |
From Optional Benefit |
||
Statutory Accident Benefits |
No Options - Medical Rehabilitation & Attendant Care Coverage |
$1 million |
N/A |
Optional Accident Benefits available |
Increased Medical Rehabilitation & Attendant Care Coverage $130,000 |
$1 million |
N/A |
Increased Medical Rehabilitation & Attendant Care Coverage $1,000,000 |
$1 million |
$1 million† |
|
Increased Optional Catastrophic Impairment Coverage $1,000,000 |
$1 million |
$1 million† |
|
Combinations of Optional Accident Benefits available |
Increased Medical Rehabilitation & Attendant Care Coverage $130,000 PLUS Increased Optional Catastrophic Impairment Coverage $1,000,000 |
$1 million |
$1 million‡ |
Increased Medical Rehabilitation & Attendant Care Coverage $1,000,000 PLUS Increased Optional Catastrophic Impairment Coverage $1,000,000 |
$1 million |
$2 million‡ |
†For a total of $2 million for Catastrophic Injury Coverage
‡For a total of $3 million for Catastrophic Injury Coverage
For more details about Ontario Accidents Benefits please click here.
What else is changing effective June 1, 2016?
Minor Accident
Minor at-fault accidents that meet all of the following criteria will no longer be used to increase your premiums:
- Damages less than $2,000 (including any property damage)
- All damages are paid by the driver who was at fault
- No personal injuries
- No payment is made by any insurer
- Applies to the first minor accident in a three year period
Comprehensive Deductible
The standard Comprehensive deductible is being set at $500 for all vehicles. The benefit to you is a reduction in your premium with a higher deductible. However, if a deductible of $500 does not meet your needs, you still have the option to contact us and change it to an amount that you're more comfortable with, both higher and lower.
Non-earner Benefit
The waiting period to receive accident benefits has been reduced from 6 months to 4 weeks for customers who are not working.
Duration of Medical, Rehabilitation and Attendant Care Benefits
The allowable time period to collect benefits for non-catastrophic injuries has been reduced from 10 to 5 years. This applies to customers who remain medically eligible for the benefit, but does not apply to children under 18 years of age.
Questions and Answers
When are the changes taking place?
The changes will be in place for new policies effective June 1, 2016. For existing customers, the changes will be reflected in your renewal documents, which you’ll receive approximately 45 days before your renewal date.
What do I need to do to have the changes applied to my policy?
The changes will be automatically applied to your policy if it renews or is effective starting June 1, 2016. If you’re comfortable with the new levels of Statutory accident benefit coverage, no action is needed on your part. However, if you’d like to discuss your coverage needs and options in more detail, give us a call before your renewal date.
How will the changes affect my premium?
The new limits for Statutory Accident Benefits are being reduced to help lower the cost of this portion of your policy and stabilize insurance premiums over time. However, your overall premium will depend on this change as well as other factors like any additional coverage you choose, where you live, the car you drive and any claims you make. While some customers will see a reduction in their premium, others may see an increase due to these others factors, as well as rising insurance costs in Ontario.
I already have additional increased Optional Accident Benefits on my policy. Will I still have this extra coverage when my policy renews?
The following Optional Increased Accident Benefits will no longer be available for policy renewals effective June 1, 2016:
- Medical and Rehabilitation Benefit of $100,000 for non-catastrophic injuries
- Attendant Care Benefit of $72,000 for non-catastrophic injuries
If your policy currently includes either or both of the Optional Benefits listed above, it will be transitioned to the new combined Optional Increased Accident Benefit for Medical, Rehabilitation and Attendant Care of $130,000. You may also choose the new $1 million limit that increases your catastrophic coverage amount to $2 million.
I currently have an Optional Increased Accident Benefit of $1,172,000 for medical, rehabilitation and attendant care expenses due to non-catastrophic injuries and $3 million due to catastrophic injuries. Will this still be available to me?
This option will no longer be available effective June 1st 2016. As a result, the new combined optional benefit for medical, rehabilitation and attendant care in the amounts of $1 million for non-catastrophic injuries and $2 million for catastrophic injuries will be included in your next renewal. Your coverage for medical, rehabilitation and attendant care in the case of catastrophic injury will therefore be reduced by $1 million and the total amount available will be $2 million instead of $3 million under your current policy. If you're comfortable with the reduced coverage, no action is needed on your part. If you continue to require the $3 million coverage for catastrophic injuries, please contact us as soon as possible to add the optional $1 million catastrophic impairment benefit to your policy.
By reducing my coverage, what will I no longer be covered for?
Even though the Statutory Accident Benefits coverage is being reduced, you will still be covered for the same types of injuries including medical, rehabilitation and attendant care costs. The new coverage limits are $1,000,000 for catastrophic injuries and $65,000 for non-catastrophic injuries. However, Optional Accident Benefits are available to increase your coverage if the new limits are not sufficient for you. You should also review any other Accident Benefits you may have outside of your auto insurance policy to determine if it fully meets your needs.
Who may benefit most from Optional Accident Benefits?
In the event of an accident, your Statutory Accident Benefits coverage will be $1,000,000 for catastrophic injuries and $65,000 for non-catastrophic injuries. Depending on your personal situation, you may want to purchase optional benefits to ensure you have additional coverage for medical, rehabilitation and living expenses. As an example, if you are retired, self-employed, if you have dependents, are unemployed or don't have additional benefits through your employer or other policies, you may need a higher amount to cover your out-of-pocket costs if you were to be injured.
To determine your need for Optional Accident Benefits, consider the below:
- Are you, your spouse and dependents eligible for OHIP?
If so, remember that OHIP will continue to cover some of the medical expenses incurred as a result of a motor vehicle accident.
- Do you have benefits through your employer or a private plan?
If so, and the coverage is sufficient, you may not need to buy optional accident benefits. Collateral benefits are primary coverage and the coverages on your automobile policy are considered secondary to those.
- Does 70% of your gross weekly income exceed $400/week?
If not, or if you have short-term/long-term disability coverage, then you may not need to purchase the optional Income Replacement coverage.
- Do you have someone who could assist you with housekeeping and home maintenance duties if you were injured in an automobile accident, or would you have to pay someone?
If you have a friend or family member who could assist with housekeeping and home maintenance duties, then you may not need to purchase this optional benefit.
- Do you provide full-time care to a dependent? If so, and you were unable to do so as a result of an automobile accident, do you have someone who could assist you or would you have to pay someone?
If you have a friend or family member who could assist with providing care to a dependent, then you may not need to purchase this optional benefit.
- Do you, your spouse and dependents have life insurance?
If so, then it may not be necessary to increase the standard death and funeral benefit.
Need more information?
For more information about the 2016 Ontario Auto Insurance Reform, please refer to the Financial Services Commission of Ontario or the Insurance Bureau of Canada websites. If you have questions about your coverage, please contact us to speak to one of our licensed Advisors.