Auto Insurance Primer Part 4: Optional Benefits

Standard accident benefits ensure all Ontarians have a minimum amount of insurance coverage to protect them in the event of a car accident. However, changes to these limits in 2016 reduced these minimum levels greatly. In this final entry of our 4-part mini-blog series on auto insurance, we’ll suggest why purchasing additional optional benefits is a cost-effective way to keep you and your loved ones safe in the event of an accident. 


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What Changed in 2016?

In an effort to reduce automobile insurance rates across the province, the Ontario government made changes to the Standard Accident Benefits Schedule (SABS). The cost for basic coverage decreased by an average of only 3.7%,[1] but the changes narrowed the criteria for catastrophic injuries and significantly reduced the scope of benefits accident victims could claim. Redefining “Catastrophic Impairment”

The changes to SABS’ definition of catastrophic injuries:

  • eliminated the well-known Glasgow Coma Scale Test;
  • required “marked impairments” in three domains or “extreme impairment” in one domain, instead of the previous threshold of “marked impairment” in one domain;
  • narrowed definitions of terms, including amputation, vision loss and paraplegia

With large sums of money on the line, these small changes can have significant implications for determining Whole Person Impairment (WPI).

Insufficient Coverage for the Seriously Injured

Besides narrowing the criteria for catastrophic injuries, the government cut the lifetime medical, rehabilitative and attendant care benefit for the “catastrophically impaired” from $2 million to $1 million and the benefits for the “non-catastrophically impaired” from $86,000 to $65,000. It also stipulated that non-earner benefits could only be drawn for two years instead of for life.

While all these cuts are unfortunate, the changes for the “catastrophically impaired” are very concerning. Less than one per cent of accident victims sustain catastrophic injuries, but the financial needs of these victims are great. As Michael Brattman, the chair of the Insurance Brokers Association of Ontario, explained: “If you’re in a catastrophic accident and have brain injuries or are confined to a wheelchair, the $1 million limit can be exhausted quickly.”

Pennies a Day for Peace of Mind

Paying slightly less for auto insurance sounds like a good idea… until you need to draw on that insurance.

The likelihood you will sustain a catastrophic injury in an automobile accident is fairly low. However, in the unfortunate event of a tragic accident, you will undoubtedly be relieved that you opted to spend a few more dollars each month in optional insurance to receive much more comprehensive coverage.

Optional benefits[2] can:

  • increase your liability coverage for accidents where you are found to be at fault;
  • provide greater amounts of income replacement benefits if the injury leaves you unable to work;
  • give you sufficient medical, rehabilitation and attendant care benefits for both catastrophic and non-catastrophic injuries;
  • extend caregiver, housekeeping and home maintenance benefits from only catastrophic impairment to all injuries;
  • index your benefits coverage with the inflation rate;

You may also want to consider additional policy endorsements (or riders) such as family protection coverage. If you or your family are involved in an accident with another at-fault driver who is underinsured, this endorsement allows you to make a claim for the outstanding damages.

If you operate under the “better safe than sorry” principle, take the time to talk to your insurance provider about how inexpensive optional benefits can make all the difference to you and your family if the unthinkable ever happens.


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Links

>>Ontario Auto Insurance Reforms Affect You: Be in The KnowSource: www.fsco.gov.on.ca/en/auto/brochures/Pages/brochure_autoins.aspx#a5

[1] https://www.thestar.com/autos/2016/05/06/changes-to-auto-insurance-policies-will-shrink-coverage.html

[2] https://mitchellwhale.com/auto-insurance/mandatory-vs-optional-coverage-ontario/ *Drawn from here, not sure if we can/should cite a particular broker.

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