The 2015 provincial budget was announced on April 23, claiming to bring adjustments and reforms to the Ontario auto insurance industry.
Initially, this sounds like a positive change. For the past 5 years, MPPs have passed bills regarding auto insurance that takes away their constituents’ rights.
However, upon closer inspection, this new budget only exacerbates the situation for motor vehicle accident (MVA) victims. Rather than protecting victims, this new budget boosts profits for auto insurance companies … again.
In February, I wrote about Bill 15’s changes to auto insurance regulations that were harmful to MVA victims:
- Victims are unable to sue their insurance company in court
- Reducing prejudgement rates from 5% to 1.3% gives insurance companies an incentive to drag on litigation rather than resolving claims
On the heels of these negative changes, the new provincial budget proposes to make matters worse. Each change announced in the new budget reduces the funding available to MVA victims, thereby reducing their chances of making a successful recovery.
Here are the changes in the new provincial budget that reduce benefits for accident victims:
The Definition of “Catastrophic” Will Be Severely Restricted
Fewer people will qualify as catastrophically impaired following a serious motor vehicle accident. Those who no longer qualify will not be eligible to receive CAT coverage, the most extensive coverage available to MVA victims.
I also expect that the narrowed definition will mean that combining physical and psychological impairments will no longer be permitted.
Coverage Available for Catastrophically Impaired Victims Will Be Greatly Reduced
The coverage available for victims qualifying for the CAT will effectively be cut in half. The previous limit of $2 Million (1 Million each for medical/rehabilitation and attendant care) will be decreased to $1 Million total for medical/rehabilitation AND attendant care combined.
There will be optional coverage available for the very few who would choose to buy back this coverage to $2 Million. However, some people will not understand this option while many others simply will not be able to afford it.
Furthermore, the standard duration for medical/rehabilitation benefits will be reduced to 5 years, instead of the previous 10 year maximum (except for children).
Coverage Available for Non-catastrophically Impaired Victims Will Be Reduced
Henceforth, medical/rehabilitation and attendant care coverage will be reduced to $65,000 for non-CAT victims. The previous combined total was $86,000.
When accounting for inflation, this reflects a 65% reduction since 2010. Before Sept. 1 2010, non-CAT benefits totalled $172,000. We have only seen a decline in coverage over the past 5 years.
Again, consumers will have the option to increase this coverage, but most will either misunderstand this option or find it unaffordable.
Finally, although the 6 month waiting period for non-earner benefits will be eliminated, the duration of these benefits will be limited to 2 years after the accident rather than to age 65 with a rampdown provision for those who turn 65 or who are injured when they are 65 years or older.
The provincial government is reducing auto insurance premiums at the expense of those who need the protection of insurance the most. Meanwhile, the auto insurance industry is making excessive profits and the Ontario government is making political gains by broadcasting the reduced auto insurance premiums.
What is the purpose of insurance if it isn’t available to those who most need it? If it doesn’t provide enough funding to help them recover from serious injury?
I have yet to see our government, or any MPPs, stand up for the rights of accident victims.
>> Roger R. Foisy is an Ontario Personal Injury Lawyer with experience in motor vehicle accident injuries. If you or a loved one has been injured, please don’t hesitate to contact us for a free consultation and immediate support.
If you are interested in more information on this topic, visit truthaboutinsurance.ca.
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