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Time to Consider Buying "Optional" No-Fault Benefits

Written by Edward H. Masters

The no‑fault accident benefits have been drastically reduced

Did you know that your automobile insurance benefits were substantially reduced on June 1, 2016? The reductions are significant, but a recent survey conducted by the Insurance Brokers Association of Ontario revealed that only 42% of consumers had even heard about the changes and less than 20% could actually identify what those changes were. 

Everyone in Ontario who buys auto insurance needs to know the extent of the reductions and what optional benefits are available to maintain their current level of coverage.

What are the most significant reductions?

The following is a brief summary of the reductions to standard accident benefits:

  • Policies issued before June 1, 2016 provided $50,000 in Medical and Rehabilitation Benefits and an additional $36,000 for Attendant Care Benefits for non-catastrophic injuries. These two types of benefits have now been combined and reduced to a total of $65,000. For many injured people, the reduced combined total will mean having to choose between receiving necessary healthcare and rehabilitation treatments or accessing attendant care. There will simply not be enough money to cover all of these expenses with only $65,000 available for both.
  • Prior to June 1, 2016, people who suffered the most serious "catastrophic" injuries could access $1 million for Medical and Rehabilitation Benefits and an additional $1 million for Attendant Care Benefits. These benefits have been effectively cut in half as there is now a new combined total of only $1 million. This means that the most seriously injured accident victims have lost $1 million in standard coverage.

What happened to my benefits on June 1, 2016?

The reductions to Accident Benefits are effective June 1, 2016. However, they will not take effect until your policy is renewed. People with policies that renewed prior to June 1, 2016 will continue with the same level of standard coverage as before until they renew their policy. The changes do not apply retroactively. This means that, if you are in an accident after June 1, 2016, but your policy renewal has not yet taken place, your old coverage will still apply.

When you renew your policy the new limits on standard benefits come into effect and they will be at the reduced level. This means that individuals injured in car accidents after June 1, 2016 may be in significantly different positions as far as what level of no‑fault benefits they can access depending on when their policies renew.

How do you make sure you have the right coverage?

It is important that you speak with your insurance company, broker or salesperson and familiarize yourself with the new benefit reductions so that you can make an informed decision about the amount of coverage you need to protect yourself and your family. You can do this by purchasing "optional" benefits at an additional cost.

Optional Benefits

You should seriously consider purchasing optional benefits. The steady erosion of the standard no‑fault benefits over the past 20 years means that the new reduced limits are no longer adequate for most of us if we are seriously injured. This means that when you renew your policy you must investigate the available optional benefits and purchase the right options to meet your specific needs.

I expect that you will find that upgrading your protection by buying optional benefits is relatively inexpensive. Based on available information, it seems that increasing the combined Medical/Rehabilitation and Attendant Care limit for non‑catastrophic injuries from $65,000 to $130,000 may cost less than $50 a year. Increasing this coverage to the maximum available of $1 million may cost under $70 a year. Increasing coverage for catastrophic injury from $1 million to $2 million may only cost about $40 a year. You may find that for about $150 a year you can increase your coverage to the maximum now available. If you or a member of your family is catastrophically injured in a car accident, you will consider it $150 well spent.

Conclusion

I often see how important accessing no‑fault benefits can be for my clients so that they can achieve maximum medical recovery in the shortest period possible. No one likes to pay for car insurance. But paying for appropriate insurance is much better than being injured in a car accident and discovering that you do not have enough insurance. Familiarize yourself with the reductions to the standard accident benefits and the amount and cost of the available optional benefits and buy the insurance protection you need to protect yourself and your family members.

If you have been injured in a car accident you should contact one of the lawyers at Burke-Robertson LLP for advice regarding your legal right to compensation.

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