Ontario’s Budget Announcement on Auto Insurance: An Avalanche of Attrition Continuing to Crush Victims’ Rights

Part Two of a Three-Part Series on the 2015 Ontario Budget. Part One | Part Three

From the September 2010 overhaul of the Statutory Accident Benefits (SABS) regime to the passing of Bill 15 in November 2014, accident victims’ rights in Ontario are being whittled down. Now with the most recent Budget Announcement, this avalanche of attrition is continuing to cascade.

According to Ontario’s Liberal government, the 2015 Budget is about “enhancing the quality of life of people” and striving to “build a fair society, with strong health care” and “support people with disabilities”. Ironically, the proposed amendments to the Insurance Act regulations will likely defeat this very purpose by draining our health care system, denying needed treatment to those who need it most and lining the insurance industry’s pockets further.

What additional changes can we expect to see from the Budget?

The Budget proposes to eliminate the six-month waiting period for non-earner benefits but will limit the duration of these benefits to a maximum of two years which had previously been payable for up to life. This change will be particularly devastating to injured students who would have otherwise qualified for an increased weekly benefit after the two-year mark as well as to other victims who continue to meet the “complete inability” test set out in section 12 of the SABS after two years.

With regards to medical and rehabilitation benefits, one proposed amendment is to reduce the standard duration of medical and rehabilitation benefits from 10 years to 5 years for all claimants with the exception of children.

Another proposed change for medical and rehabilitation entitlement is to require goods and services not explicitly listed in the SABS to now be “essential” and agreed on by the insurer. This moves away from the current and less onerous definition of “reasonable and necessary”.

Given the reduction in coverage to accident victims, many may turn to the court system in efforts to recover their lost medical and rehabilitation and caregiving expenses. Unfortunately, the Budget also proposes further amendments to the Insurance Act that includes adjusting the tort deductible (currently $30,000) on court awards for pain and suffering by linking the deductible to inflation. Based on a Bank of Canada inflation rate calculation, at present this would reflect a deductible of $36,750.73 or a 22.5% increase from the present deductible.

Similarly, the government has proposed adjusting the monetary threshold beyond which the deductible does not apply (currently $100,000) to inflation. Based on a Bank of Canada inflation calculation, this would reflect a threshold of $122,502.40; also a 22.5% increase from the present threshold limit.

It is interesting to note that although the Budget now proposes to link the tort deductible and threshold cap to inflation, accident benefits payable by Ontario insurers are not linked to inflation and continue to be whittled down over time. This one-sided approach favours insurance companies to the detriment of accident victims.

The government’s changes must address all key stakeholders through consultation before taking such drastic measures; not just insurance company stakeholders and their lobbyists. The small accident victims and their families cannot be an afterthought. There is still much work needed to be done but it can start with bottom up leadership. Writing your local MPP to express your concerns about the proposed changes is a great place to start!

 

This blog post was contributed by Lawson Hennick, associate lawyer with Yermus & Associates and the creator of Lawbubble.com

Part Two of a Three-Part Series on the 2015 Ontario Budget. Part One | Part Three

Lawson Hennick
Written by

Lawson is the creator of LawBubble.com, an online blog exploring legal issues, trends, and developments.

He received his Bachelor of Science degree in Biology from York University, and then attended University of Ottawa’s Faculty of Law graduating with a Bachelor of Laws degree in 2009 before being called to the Ontario Bar in 2010.

Lawson articled with a boutique litigation firm where he gained experience in a variety of practice areas including representing Indian Residential School survivors to obtain compensation through the Independent Assessment Process for sexual and physical harms suffered.

Since his call to the bar, Lawson has devoted his legal practice exclusively to the area of personal injury law before joining Yermus & Associates where he regularly acts for clients on injury claims including motor vehicle accidents, slip and falls, product liability and dog bite cases. He regularly appears before the Superior Court of Justice and has also appeared before the Financial Services Commission of Ontario (FSCO).