Looking for Car Insurance in Ontario? Topics for Speaking with Your Insurance Broker

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					 Looking for Car Insurance in Ontario? Topics for Speaking with Your Insurance Broker

                               By Anna Szczurko, Siskinds LLP

We all drive with the hope and misplaced expectation that we will not be involved in a car crash.
Unfortunately, a lack of foresight and proper planning can lead to devastating consequences in
the event of a motor vehicle accident and you do not have the proper amounts of auto insurance
to protect you and your family while you recover from your injuries. This article will provide you
with a primer on auto insurance in Ontario, review the recent changes to the statutory benefits
(‘SABS’) and offer some suggestions to consider reviewing with your broker when purchasing
car insurance.

In Ontario, everyone who drives a car needs to purchase a minimum amount of car insurance.
The minimum amount of liability insurance required is only $200,000. Ensuring that you have
sufficient liability coverage is only one of a host of choices and decisions you will need to make
when purchasing the right amount of coverage for yourself, your family and your budget.

There have been recent changes to the Ontario insurance regulations. As of September 1,
2010, all renewals for car insurance in Ontario have had the amounts of “optional” car insurance
benefits significantly cut. When you renewed your car insurance after September 1, 2010,
many of the benefits that were previously ‘automatic’ were made ‘optional’. When
speaking with your broker it is a good idea to have these changes clarified.

If you have ever discussed insurance with your insurance broker, you quickly learned that the
car insurance “options” or “optional benefits” can be intimidating and complicated. In addition to
the minimum liability amounts, you have the option to purchase additional ‘buckets’ of
insurance. These ‘buckets’ of Statutory Accident Benefits (or ‘SABS’) are your first line of
defence after a car accident to support you in getting well and pay the bills if you are unable to
work. SABS are there to provide you with initial monetary care and support during your

Mandatory Insurance

So what are the basic car insurance options typically included in Ontario? Mandatory coverage
in order to drive in Ontario must include the following:

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       Third party liability which covers you if you accidently injure someone or damage their
       Accident benefits (‘SABS)’ provide statutorily designated ‘buckets’ of coverage for
        supplementary medical, rehabilitation and income replacement benefits. See below for
        further details.
       Direct compensation property damage allows you to claim for damage to your car if
        the motor vehicle collision is not your fault, even if you only have ‘one-way’ insurance;
       Uninsured/unidentified driver coverage protects you and your family if you are injured
        by an uninsured or unidentified driver, even if you are a pedestrian or bicyclist.

Optional Insurance

Most people will also choose to purchase additional coverage for their vehicle in the form of
collision coverage or comprehensive coverage endorsements.

       Collision coverage requires your insurance company to reimburse you for damage
        caused to your vehicle as a result of a collision, even if you are at fault. If your car is
        leased or financed this coverage is typically required.

       Comprehensive coverage protects you for loss or damage to your vehicle not caused
        by a collision, such as theft, fire, flood or windstorms. These amounts are determined
        based on the value of your vehicle – be sure to speak with your broker if you are driving
        a new car or collectible/antique.

       Statutory Accident Benefits or ‘SABS’ are a critical part of your insurance coverage
        and are essential to your financial health in the event you are injured in a collision. This
        chart outlines the major benefits and what has changed after September 1, 2010. The
        benefits highlighted indicate the significant changes in the mandatory statutory accident
        benefits from before and after September 1, 2010:

Benefit                          Before September 1, 2010              After September 1, 2010

Income Replacement               80% of net weekly income;             70% of gross weekly income;
Benefits to provide you with
                                 Maximum amount of $400 per            Maximum amount of $400 per
income if you are unable to
                                 week unless optional benefits are     week unless optional benefits
work as a result of our
                                 purchased. Waiting period of 7        are purchased (up to $1,000
                                                                       per week). Waiting period of 7

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                                days.                                 days.

Non-Earner Benefits to          $185 per week after a 26 week         $185 per week after a 26 week
compensate you if you suffer    waiting period; after two years this waiting period; after two years
a complete inability to carry   increases to $320 for students.       this increases to $320 for
on normal life                                                        students.

Caregiver Benefits for those    $250 per week plus $50 for each       $0
who are the primary             additional dependant.
                                                                      Only if optional benefit is
caregiver of someone under
16 years of age.

Medical and Rehabilitation      $100,000 or                           $3,500 for “Minor Injuries” or
benefits to pay for
                                $1,000,000 for catastrophically       $50,000 for injuries not ‘Minor’
physiotherapy, wheelchairs
                                injured individuals                   or catastrophic; or
and other expenses not
                                                                      $1,000,000 for catastrophically
covered by OHIP
                                                                      injured individuals

Attendant Care Benefits to      $72,000 over two years or             $36,000 or
pay for someone to help care
                                $1,000,000 for catastrophically       $1,000,000 for catastrophically
for you as a result of your
                                injured individuals                   injured individuals

Housekeeping and Home           $100 per week for two years           $0
Maintenance to pay for
                                                                      Only if optional benefit is
someone to help with
housekeeping chores, snow
removal, yard work etc.

For more information on the above, visit the Financial Services Commission of Ontario, the
governing body for insurance in Ontario, at www.fsco.gov.on.ca under “Auto Insurance”.

As the above chart illustrates, there are two significant areas of change:

A. The change in medical rehabilitation benefits to $50,000

One of the most significant changes in the post-September 1, 2010 insurance is the reduction of
maximum medical and rehabilitation benefits from $100,000 to $50,000 over the course of 10

www.siskinds.com                                                                      Siskinds LLP

years. While $50,000 may appear sufficient at first glance, many of the common injuries
sustained in a motor vehicle collision follow a progression in their treatment from physiotherapy
to gym programs, acupuncture treatments and massage therapy over a course of several years.
The costs can quickly add up to more than $50,000. Consider that this treatment is required to
not only help you get better, but also to allow you to keep working, manage your pain and if
required assist in your rehabilitation into a new career or life.

Another change that strongly impacts the availability of the $50,000 is that the cost of the
insurance company’s assessments – their tool for determining if the treatment recommended by
your medical team is ‘reasonable and necessary’ – are now subtracted from your $50,000 for
medical rehabilitation. This is yet another strain on an already insufficient amount. For these
reasons, I would encourage everyone to purchase the $100,000 optional limit for medical and
rehabilitation benefits. I would also encourage most people to consider purchasing an optional
benefit to $1,100,000 in medical rehabilitation. Keep in mind that if you purchase it on your
policy, in most cases it will cover you and your dependants (i.e. spouse, children etc) for no
extra charge.

B. The change in caregiver benefits and housekeeping/home maintenance

Practically, the restricted availability of caregiver benefits will have the most impact on unpaid
caregivers. Unpaid caregivers include stay at home parents, parents caring for disabled
children, and children caring for their elderly parents. The elimination of caregiver benefits from
mandatory coverage will leave these already vulnerable families without weekly benefits for the
first two years after the accident. This is further compounded by the removal of housekeeping
and home maintenance benefits.

If you have young children at home or are otherwise involved as a key caregiver who does not
earn a paid income, strongly consider adding caregiver and housekeeping/home maintenance
benefits to your insurance plan. In the event of an accident, this will provide you with a means to
pay for a substitute caregiver while you recover from your injuries.

Thoughts to Keep in Mind

Your insurance broker is a professional who is obligated to properly advise you of your options
in purchasing motor vehicles insurance, not just try to sell you the cheapest premium. Brokers
are under a duty to you as a consumer and may be held liable if they fail to describe to you all of

www.siskinds.com                                                                     Siskinds LLP

the available optional benefits.1 It is worth your time, and peace of mind, to speak with your
broker to ensure that you and your loved ones are adequately covered by your policy. After a
car accident is not the right time to try to deal with this issue.

Additional options you might need to keep in mind to discuss with your insurance broker,
depending on your personal situation, may include:

         Everyone – protect yourself to make sure you will have adequate funding to get the
          treatment you require. Optional medical/rehabilitation benefits should be at $100,000.

         Young Children? Discuss purchasing optional caregiver benefits and additional
          housekeeping/home maintenance benefits. Ensure that your liability policy limits are
          generous with a family protection endorsement to protect your family in case of tragedy
          (see below re: family protection).

         Family protection? Standard in most Ontario policies, the family protection plan
          provides additional protection if you are involved in a motor vehicle accident caused by
          an underinsured or unidentified motorist. This allows you to access your own liability
          policy limits if you are insufficiently covered by the at-fault driver’s insurance.

                  For example, if you have a $3 million dollar liability policy on your vehicle and
                  are struck by a driver with the minimum $200,000 policy, the family protection
                  endorsement will allow you to access up to $2.8 million in coverage from your
                  own insurer.    I would strongly recommend high liability policy limits and the
                  family protection endorsement for anyone who is frequently driving with multiple
                  passengers or young children who can suffer devastating injuries in a motor
                  vehicle accident.

         Hard Worker? Ensure that your income replacement benefits are set at 70% of your
          gross weekly wages. For most people, if you have income in excess of $34,000 per
          year, the standard $400 will not be sufficient.

    See Zefferno v. Meloche Monnex Insurance [2012] ONSC 154.

www.siskinds.com                                                                            Siskinds LLP

      New car? Discuss whether a new vehicle protection plan is appropriate for you and your
       budget. Without this endorsement, you will receive the “fair market value” of your car, not
       what you paid for it (even if you just drove it off the lot!). You can lock in the value of your
       car by requesting your broker remove the depreciation deduction (replacing your car with
       a new one should it be stolen or declared a total loss) or a new vehicle protection plan
       that will protect your new car against depreciation.

As general rules of thumb, everyone should purchase the increased Medical and Rehabilitation
and attendant care benefit at $1,100,000. Most people should consider purchasing increased
Income Replacement Benefits. Those of you with children should consider optional Caregiver or
Housekeeping/Home Maintenance benefits along with the increased liability limits.

Speak with your insurance broker about the choices in coverage and options that are right for
you and ensure that you are adequately protected for your peace of mind. Keep the above tips
and thoughts in mind when comparing your insurance policy coverage and premiums from
previous years.

If you have any questions about insurance issues or accident benefits arising out of a motor
vehicle collision whether in Ontario or elsewhere, please contact Anna Szczurko or call (519)
660-7784 to arrange a free consultation.

If you have questions about your legal rights please contact Anna Szczurko or call 519-660-
7822 for a free consultation.

www.siskinds.com                                                                         Siskinds LLP

Description: We all drive with the hope and misplaced expectation that we will not be involved in a car crash. Unfortunately, a lack of foresight and proper planning can lead to devastating consequences in the event of a motor vehicle accident and you do not have the proper amounts of auto insurance to protect you and your family while you recover from your injuries.