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You all know you need car insurance – you can’t drive a car in Ontario without it. And most of you will have some familiarity with the “no-fault” regime – accident benefits that are available from your own insurance company if you are injured in a car accident, regardless of fault. What most of you do not know, however, is that on September 1, 2010 your accident benefits were dramatically reduced, and in some cases eliminated, with the introduction of the new Statutory Accident Benefits Schedule O.Reg. 34/10 (New SABS).

How did car insurance reach this new low? The no-fault system started out in 1990 with good intentions. As consumer protection legislation, those injured in car accidents were promised specified levels of benefits, appropriate treatment, and fair compensation for their injuries. However, change after legislative change has been wrought by successive governments, all in the name of controlling automobile insurance rates. As a practitioner, I can attest to the fact the situation has gotten worse, not better.

In general terms, before September 1, 2010, if you were hurt in a car accident you had (i) up to $100,000.00 worth of medical and rehabilitation coverage; (ii) attendant care coverage to a maximum of $72,000.00 for the first two years; (iii) housekeeping and home maintenance benefits of $100 per week for the first two years, in addition to other benefits, including some form of income continuation (either income replacement benefits, or caregiver benefits if you were caring for someone before the collision, or non-earner benefits if you weren’t working but suffered a complete inability to carry on a normal life). If you were catastrophically injured, these benefits increased significantly, with medical and rehabilitation coverage increasing to $1,000,000.00, attendant care increasing to $1,000.000.00, etc.

However, the New SABS is arguably the worst assault on Ontarians since the advent of no-fault insurance. Your benefits weren’t just cut – they were lacerated, chewed up to a mere ghost of their earlier incarnations. The $100,000.00 in medical and rehabilitation benefits? Chopped in half to $50,000.00. And now the cost of any assessment is to come out of this reduced amount – before September 1, 2010 the insurance company paid for assessments.

For example, in cases of serious injury, it was not unusual on a file with $60,000.00 of total costs incurred, to have $30,000.00 of that spent on examinations. This was a result of a number of factors which needed to be addressed, but reducing medical and rehabilitation coverage was not the way to fix what was wrong. It would have made more sense to maintain the $100,000.00, and have assessments paid from this amount. Even a reduction to $75,000.00 in coverage, inclusive of assessments, would have been more palatable. Do the math – with only $50,000.00 in coverage, many who are significantly injured will run out of medical and rehabilitation benefits within the first six months, if not sooner.

Oh, and good luck even getting access to the $50,000.00. Most insurance adjusters are slotting anyone who submits a claim for accident benefits into the Minor Injury Guideline (MIG), which limits medical and rehabilitation benefits to $3,500.00. Studies since September 1, 2010 estimate that over 50% of all injured persons are being lumped into this category. Thus, the MIG has created yet another hurdle for the injured. If your injury falls within the definition of a minor injury (sprain, strain, whiplash associated disorder, contusion, abrasion, laceration or subluxation and any clinically associated sequelae) but you need more treatment than what $3,500.00 will get you, your treating practitioner must provide “compelling evidence” of a pre-existing condition which would prevent recovery within the MIG limits. What if you don’t have a treating practitioner? Furthermore, “compelling evidence” has not been judicially considered, so it’s anyone’s guess as to what an adjuster will deem sufficient documentation to get you out of the MIG.

As for your other benefits? Attendant care benefits reduced to $36,000.00. Housekeeping and home maintenance benefits have been eliminated entirely. Caregiver benefits were also eliminated entirely. For those catastrophically injured, the enhanced coverage has essentially remained the same. Note the government will very likely introduce changes to the definition of catastrophic impairment over the summer, severely restricting the number of people who meet the test and qualify for the enhanced benefits.

Stakeholders say the New SABS was created under the guise of offering consumers more choice – and one upside to the changes is that most coverage can be “bought back” through optional benefits – in other words, you have to pay more to get the same coverage you had before the September 1, 2010 changes. But is anyone actually buying back their coverage? Optional benefits existed under previous no-fault regimes, but Ontarians rarely took advantage of this opportunity. Research conducted in 2011 indicates that this trend hasn’t changed – less than 1% of consumers purchased increased income replacement benefits. Even more alarming, only 1.31% of consumers increased their medical and rehabilitation benefits to $100,000.00.

What can you do? Don’t just “automatically renew” your insurance policy. Make an appointment to speak to your broker and ensure you have the coverage you need. Don’t wait until you are injured, and vulnerable, to have reality deal you another blow. After reading this, what you DO know can help you.

Annette Casullo is a partner at Will Davidson LLP in Huntsville practicing plaintiff personal injury litigation, including plaintiff motor vehicle litigation. Annette has been certified as a Civil Litigation Specialist by the Law Society of Upper Canada.

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