Car Insurance Accident Benefits & Changes in Ontario

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In Ontario, any person who is injured in a collision or certain relatives or dependants of that person are entitled to accident benefits. For those insured under multiple policies, additional rules determine which policy will be responsible for paying benefits. Income replacement benefits, non-earner benefits, lost education expenses, expenses of visitors, and housekeeping and home maintenance are some areas for which Ontario car insurance companies are responsible.

Income Replacement Benefit

If the accident you are involved in affects your ability to work, you may be eligible for the income replacement benefit. This partially compensates for the loss of your income up to 70% of your gross income, to a maximum of $400 per week.

Non-Earner Benefit

If you’re not employed outside of the home, but the accident causes you to no longer be able to carry on your normal activities, the non-earner benefit will help compensate you.

Caregiver Benefit

If you are the primary caregiver of a child or elderly person, this benefit will reimburse you for any expenses you may incur to find alternate care options. These benefits are typically $250 per week for one dependent, plus an additional $50 per week for extra dependants. This benefit is only available to those with catastrophic injuries.

Medical & Rehabilitation Benefit/Attendant Care

This benefit covers the expenses associated with medical and rehabilitation services that are not covered by a government or private plan. This includes attendant care if you cannot carry out certain personal activities such as bathing, going to the bathroom, dressing, or feeding yourself, due to severe injuries resulting from an accident. The auto insurance industry in Ontario pays about $150 million per year to the Ontario Health Insurance Plan to offset the costs of this benefit. For non-catastrophic injuries, standard coverage is $50,000 for medical and rehabilitation. Attendant care coverage is $36,000. For catastrophic injuries, the standard compensation is $1,000,000. For attendant care, the coverage is $1,000,000.

Death & Funeral Payments

If the other person involved in the crash is killed, car insurance will help cover the funeral services. To qualify, you must notify the insurance company within seven days of the accident. The insurer will provide you with an application which you must return within thirty days. The standard amount of coverage is $25,000 to an eligible spouse and $10,000 for each dependent. $6,000 are allowed for funeral expenses.

Other Expenses

In addition to the benefits listed above, certain other expenses may also be covered. Lost education expenses, the cost of people visiting during treatment, housekeeping, and even home maintenance may all be covered after a motor vehicle collision. Replacement or repair of certain items such as clothing that were lost or damaged in the collision could also be covered.

Car Insurance Accident Benefits June 2016 Update

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Ontario’s car insurance is the highest cost insurance in Canada. The provincial government is actively trying to lower premiums through a number of strategies. Most recently, legislation to consolidate and reduce accident benefits took effect, lowering both insurance companies’ exposure to loss and insured motorists’ fundamental coverage.

Changes were made to the non-catastrophic class of benefits. Previously, medical/rehabilitation and attendant care costs were separate categories and subject to $50,000 and $36,000 limits. These are now combined and subject to one $65,000 limit.

The definition of a catastrophic injury has been updated to reflect contemporary medical evaluations. As well, medical/rehabilitation and attendant care costs have changed for this class of injury. Limits prior to this legislation had separate $1 million limits for both categories. These are combined in a single $1 million payout. Previously, optional coverage for these categories was not available, but with the reduced payout, drivers now have the opportunity to add an additional $1 million in coverage.

Finally, medical, rehabilitation and attendant care benefits for minor injuries are now capped at $3,500.

Accident Benefits Changes In Ontario

The August 2015 Ontario budget proposed changes to auto insurance regulations to take effect June 1, 2016. Suffering the highest car insurance in the country, year after year, these changes are intended to provide relief to beleaguered motorists by reducing some of the load borne by insurers. The changes with the biggest impacts concern the definition of catastrophic impairment, benefit limits for both catastrophic and non-catastrophic incidents and benefits to a class of beneficiaries called non-earner benefits.

Non-Earner Accident Benefits

A non-earner is a person who wasn’t working at the time of an accident. It serves as a catch-all category for people who didn’t fit under income replacement benefits or caregiving benefits. Traditionally, the non-earner category was not only difficult to classify, but it was subject to a waiting period of 26 weeks prior to payout.

The June 2016 changes reduce the waiting period to 4 weeks. However, the insurer is no longer responsible for payment of benefits after two years. Since this category is for insured recipients who can no longer carry on a normal life, if a condition remains after two years, it’s likely the person will benefit from long-term disability through other coverage, or may be receiving disability benefits through a government program.

Catastrophic and Non-Catastrophic Benefit Limits

Previous to the June 2016 changes, these two classes of benefits had separate payouts and maximums. Non-catastrophic benefits were capped at $50,000 for medical treatment and rehabilitation, and $36,000 for attendant care benefits. These have been combined under a single global limit of $65,000 with an availability period of 5 years after the accident. Previously the availability was 10 years post-accident. In the case of minor children, the five-year period starts when the insured turns 18.

Catastrophic benefits also had separate obligations for medical/rehabilitation and attendant care of $1 million each. These too have been combined into a single limit of $1 million. This reduces the potential exposure of insurers by 50 percent.

Catastrophic Impairment Definition

Since catastrophic impairment dramatically increases the benefit payout, defining what constitutes such impairment is important for insurance companies to know when underwriting policies. Prior to the June 2016 changes, an obsolete medical scale was used to determine the level of impairment. This has been replaced by three scales based on more up-to-date medical knowledge and targeted to specific types of injuries.

Spinal cord injuries are now measured against the American Spinal Injury Association’s classification, which includes looking toward a patient’s potential recovery. The whole-person evaluation uses an American Medical Association scale that incorporates mental impairment measures. The third scale is a modern update of the previously used system, which dated back to 1975. The update expands the framework of the scale as well as how it is assessed.

This change is intended to reflect more accurately the condition and prognosis of insured people receiving benefits, intended to reduce the load on insurers based on more appropriate care and treatment of those receiving accident benefits.

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