Checking in with the Insurance Act: Ontario Eliminates Fatality Deductibles...

With all the new changes to the Statutory Accident Benefits Schedule and Insurance Act that came into force as of September 1, 2010 it is important to recall how this affects our clients' tort claims.

Bill 16 Amendments to Ontario's Insurance Act

Bill 16, the Creating the Foundation for Jobs and Growth Act, 2010, which received Royal Assent on May 18, 2010 included the following amendments to the Insurance Act:

• Eliminating tort deductibles for fatality claims

• Changing the calculation of tort income loss from 80% of net income to 70% of gross income

How the $15,000 Statutory Deductible Affected Fatality Claims

Under the previous SABS regime, there was what many called an inappropriate $15,000 statutory deductible that applied to claims made by family members following the death of a relative caused directly or indirectly by a motor vehicle accident that occurred in Ontario.

In MVA fatality cases, family members of the deceased are looking for justice in both the civil and criminal context. A statutory deductible is a mandatory amount deducted in accordance with the applicable statute. The new legislation effective September 1, 2010 has rejected the formerly controversial $15,000 statutory deductible that applied to claims of family members following the death of a relative after a motor vehicle related death. It is important to note that claimants who make a claim under the Family Law Act for loss of care, guidance and companionship as the result of the death of a family member in excess of $50,000 were not subject to the $15,000 deductible and are not subject to any deductible today. If an uninsured or unidentified driver caused the death, families may still claim through the Motor Vehicle Accident Claims Fund.

Section 267.5 (8.1.1) and Proving Direct or Indirect Causation

Bill 16 has amended the Insurance Act by added subsections 267.5 (8.1.1) which eliminates the deductible and states that the deductible " [does] not apply to damages awarded to non-pecuniary loss awarded in respect of a person who dies as a direct or indirect result of an incident that occurs after August 31, 2010." The language of this new subsection begs the question, what definition of accident is the appropriate definition and how do we prove indirect and direct causation. The Statutory Accident Benefits Schedule defines accident as:

"an incident in which the use or operation of an automobile directly causes an impairment or directly causes damage to any prescription eyewear, denture, hearing aid, prosthesis or other medical or dental device".

Under the SABS, a death benefit is payable if an insured person dies within either 6 months of the accident or 3 years of the accident as a result of being continuously disabled from that accident. If you examine the language of the Insurance Act, no deadline is mentioned for accident- related deaths in tort claims. How these claims will be handled remains to be seen...Could the elimination of the statutory deductible cause further confusion and further disputes?

Getting Help After a Fatal Car Accident in Ontario

Gluckstein Personal Injury Lawyers reminds you that for further information on the changes to Automobile Insurance, please visit our website. We know no amount of money can replace someone you love, but you should not have to face these questions alone. Book a free consultation to talk it through, and you pay no legal fees unless we recover compensation for your family. You can also read, in their own words, how other families felt about working with our team.