Personal Injury Law: Insurance changes a catastrophic ambush

Author(s): Darcy R. Merkur

May 4, 2015

As part of the provincial budget announced on April 23, the Ontario government has decided to first throw seriously injured accident victims off the bus and then deprive them of the ability to make a good recovery. The announcement comes as a total blindside to interested stakeholders.

Historically, whenever the Ontario government was considering major changes to automobile insurance legislation, there was widespread consultation with stakeholders. That consultation process consistently revealed it was common ground among all stakeholders that it was sacrosanct to reduce the benefits available to the most seriously injured persons. As a result, prior changes focused on changes other than reductions in the benefits available to the catastrophically impaired.

The government’s announcement includes five major changes. Each change reduces the funding available to accident victims. Each change reduces the chance for an accident victim to regain their independence. Each change results in further pressure on the currently under-resourced public health care system.

The changes, in order of least to most significant, are:

  • A reduction in the benefit maximums in non-catastrophic impairment claims from the current total maximum of $86,000 (being $50,000 for medical and rehabilitation benefits plus $36,000 in attendant-care benefits) to a combined total of $65,000. In addition, the duration for accessing these benefits falls to five years from 10 years except in cases involving children. Prior to Sept. 1, 2010, changes, these benefits totalled $172,000, so the new reduced maximum, after accounting for inflation, is about a 65-per-cent reduction from the amounts available prior to that time.
  • A reduction in the duration of eligibility for non-earner benefits from life to a maximum of two years (albeit without the six-month waiting period that currently applies). This change will affect students the most as they had previously qualified for a higher weekly benefit rate of $320 a week after two years. For example, a seriously injured teenager who will never work again because of accident-related injuries will now be unable to access the weekly benefit.
  • Indexing the tort deductibles to inflation since 2003. This change means that anyone with a valid claim for pain and suffering will face an inflated deductible of roughly $37,000 instead of the current $30,000 unless their pain and suffering award is assessed at more than the inflated vanishing deductible of roughly $123,000. While this change is arguably an attempt to adjust the previous deductibles to the level intended in 2003, it’s notable that the accident benefit limits have all remained unchanged by inflation for the last 20 years.
  • The intention to revise the definition of catastrophic impairment purportedly in an effort to capture only the most seriously injured persons. Given that the expert panel on this issue had recommended the removal of the simple, efficient, and popular Glasgow coma scale test, the revised definition will undoubtedly be seen as a significant narrowing of the catastrophic impairment designation. Moreover, by changing the now well-understood tests that have been in place for close to 20 years and by eliminating the simple and easy Glasgow coma scale test, identifying who will qualify for catastrophic impairment will be more challenging.
  • A reduction in the maximum benefits available to catastrophically impaired people from $2 million ($1 million in medical and rehabilitation benefits plus $1 million in attendant-care benefits) to a total of $1 million. This $2-million maximum has been in place for roughly 20 years and, after accounting for inflation on all of the potential benefits, these further changes will cut the amounts by roughly 70 percent of what was available back in 1996.

Insurance, by its nature, is there to protect against unexpected events. The government’s announced reductions to automobile insurance benefits provide no such protection. The changes serve to defeat the very purpose of mandatory automobile insurance in Ontario.

The government is making these changes as part of an attempt to address the political pressure to reduce automobile insurance premiums. However, it’s making the changes without an investigation into the legitimate questions about the excessive profits earned by the very insurers the government is trying to appease and before it has assessed the savings from the last round of reforms.

Through these reductions, the Ontario government has sacrificed the most vulnerable citizens for political gain.

View original article as it appeared in on May 4, 2016, Personal Injury Law: Insurance changes a catastrophic ambush

Darcy Merkur is a partner at Thomson Rogers in Toronto practising plaintiff’s personal injury litigation, including plaintiff’s motor vehicle litigation. He’s a certified specialist in civil litigation and creator of the Ontario personal injury damages calculator.


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