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How broken is Ontario’s Auto Insurance System

The Ontario government is reviewing auto insurance! The Minister of Finance, the Hon. Vic Fedeli has said “the previous government’s failed system of stretch goals on auto insurance is clearly broken.”

Just how broken is Ontario’s auto insurance system? In a series of articles, OTLA will explore the key issues in Ontario’s dysfunctional auto insurance system as the province considers options for reform.

If you have not yet read part one of this series, click here: How Broken is Ontario's Auto Insurance System - Part One

Part two – Just how broken is Ontario’s Auto Insurance System?

Issue: Restrictions to Accident Benefits Coverage: Catastrophic Impairment. In 2016, the previous government brought in several harsh restrictions that hurt the most seriously injured auto accident victims. Who are the most seriously impaired? The most seriously or catastrophically impaired auto accident victims have suffered the most debilitating injuries, including amputations, blindness, traumatic brain injuries, or paralysis. The major changes to coverage introduced not quite three years ago, resulted in benefits being cut dramatically, making recovery for accident victims more difficult. The first move was to make it a lot more difficult for people to be considered catastrophically impaired in the first place. 

A new, revised technical definition was introduced. The effect of the definition change meant only approximately 200 people a year would be designated catastrophically injured where previously upwards of 600 seriously injured accident victims would qualify. As a result, these individuals who were denied coverage would be forced to depend on scarce public resources to support their care and treatment thereby increasing the costs to the government. Also, under the new definition, the test used to assess injuries would be applied much later than was done previously. This would mean that people would not receive early access to treatment when they needed it most! The second, drastic reduction the previous government made was to slash the available coverage from $2 million to just $1 million!

Prior to the changes, a person who sustained a catastrophic impairment potentially had up to $1 million in attendant care benefits and $1 million in medical and rehabilitation benefits available. Attendant care is personal care that patients cannot do for themselves because of their injuries. It includes bowel care and other issues related to incontinence, bathing and basic hygiene. Medical and rehabilitation benefits included reasonable and necessary medication and rehabilitation expenses such as physiotherapy that are not covered under OHIP.

These benefits have now been reduced to a combined potential entitlement of $1 million. This means that $1 million of treatment funding has been unilaterally revoked from those who are most seriously injured, and, it must be stressed, with no reduction in insurance premiums. A million dollars may sound like a lot of money but, in the context of the round-the-clock care required for someone who has sustained serious injuries, a million dollars does not go very far. With the reduction to $1 million, most such victims will run out of funding for their recovery and treatment long before achieving meaningful rehabilitation. In such a case, an injured person would run out of benefits - all benefits - in under 15 years without even taking into consideration any of the victim’s treatment needs. In addition to attendant care, this victim would also require extensive rehabilitation, which would cost thousands of dollars per year. It is not uncommon to see all funding for such a person exhausted within 10 years of the accident, or less, for benefits that were supposed to last for the injured person’s lifetime.

When a victim runs out of funding but continues to have medical needs, they are forced to incur theses costs on their own or rely on social assistance. This in turn causes serious financial hardships for injured persons and their families and puts more pressure on our over-burdened health care system.

An accident victim who has sustained a traumatic brain injury may require 24/7 attendant care, feeding, mobility support, and transfers. Patients who require this type of service are often self-conscious, and prefer to receive personal care from family members. The insurance limit on these benefits is only $6,000 per month. It may, and often does cost more in lost wages or to hire someone to provide the care, however those extra costs cannot be recovered through accident benefits.

One of the harsh restrictions introduced over the years made it a lot more difficult for family members to seek compensation through the insurance system for the personal care they provide to their loved ones. The current requirement that family members must suffer an economic loss to receive compensation is overly restrictive and unfair. They are performing a service and that service has value. It is unfair not to pay a family member for the work an outside support worker would be paid. In fact, family members can often provide better care, which can lead to a better outcome for their loved one. The patient’s familiarity with the family member also allows the patient to maintain greater dignity. And, most people do not want strangers in their house preforming very private matters like helping someone go to the bathroom.

The cuts to accident benefits for those who are catastrophically impaired impact everyone. It impacts the injured party and their families by causing financial strain and restricting the care they can receive, and it causes many of these expenses to fall to taxpayers through the victims’ reliance on social assistance and publicly funded healthcare providers.

* The information above is not intended to be legal advice. Each situation is different and the information provided above may not provide you with all law applicable to your facts. To ensure you are properly protected under the law applicable to your facts, please contact Murray Ralston Law for a free consultation.