Ontario Auto Insurance: What are we paying for?

If you drive a vehicle in Ontario, the law requires that you insure your vehicle. Every auto insurance policy includes mandatory no-fault benefits. We pay for these benefits with our premium dollars. While premiums have continued to climb year after year, the no-fault accident benefits for injured victims continue to erode. While benefits have been steadily declining for many years, the changes that were imposed in September 2010 were the most drastic and punitive to date.

The highlight for the insurers and the low point for injured victims was the introduction of the Minor Injury Guideline, commonly referred to as the MIG. Before September 1, 2010, the standard auto insurance policy in Ontario included a limit of $100,000 to pay for reasonable and necessary medical and rehabilitation treatment. This did not mean that every person injured in a car crash in Ontario was entitled to $100,000; however this did mean that provided the injured person needed medical and rehabilitation treatment, those treatments would be covered up to a maximum of $100,000. The insurer still had to approve the treatment, but at least if the treatment was approved there was money to pay for that treatment. The introduction of the MIG in September 2010 dramatically changed the landscape for almost all Ontarians injured in motor vehicle collisions. The MIG caps the payment for all medical and rehabilitation treatments at $3,500. This means that if an insurer puts a person injured in a motor vehicle collision in the MIG, that person can only receive treatment up to a maximum cost of $3,500. This might not be so bad if the MIG only truly captured “minor” injuries. Sadly, insurers in Ontario are classifying up to 75 percent of all auto crash victims in Ontario as MIG injuries and capping all medical and rehabilitation treatments at $3,500. Even if you are in the lucky 25 percent that insurers are not putting into the MIG and capping coverage, your coverage for medical and rehabilitation benefits have been reduced from $100,000 to $50,000.

There can be no question that the insurers are the big winners from the September 2010 auto insurance changes. When premiums remain unchanged or go up and claim costs go down, the insurer’s profits skyrocket. Here’s what one insurance CEO commented after the September 2010 changes to auto insurance benefits:

“We are starting to see the benefits of the 2010 auto insurance reforms in Ontario, which is combining with our recent focus on proactive broker management and underwriting discipline to generate stronger results.”

In two short years since the September 2010 auto insurance changes, auto insurance claims in Ontario were down more than 20 percent or a reduction of $4 billion. In that same two year period, auto insurers have reported more than $3 billion in profits. It should come as no surprise to anyone that insurers will profit when benefits for insured victims are reduced and in many cases eliminated.

In wake of these changes, Ontario now has, in practical terms, the lowest level of no-fault coverage for medical and rehabilitation benefits in the country. Ontario is also the only jurisdiction in the country with a special category of auto insurance for so called “minor” injuries.

These changes not only affect those injured in car crashes but the impact can and will be felt by all Ontarians. As the insurers limit medical and rehabilitation benefits, those injured individuals will have no choice but to seek treatment from the publicly funded OHIP system. The lack of treatment will also lead to more people not being able to recover and return to work and need to look to the publicly funded social security net. Meanwhile insurers continue to report record profits.

These changes are only the latest and most drastic erosion of auto insurance benefits in Ontario. Toronto Sun columnist Alan Shanoff has documented the steady decline in coverage over the years in Ontario. Read his comments here.

He ends his article as follows:

One thing is certain. The current system can’t get much worse for accident victims. Victims need timely, adequate accident benefits even more than they need premium cuts.”


Written by

Kris focuses on helping people who have suffered serious personal injuries, car crash victims and long-term disability claims. Kris also helps people who are facing impaired driving and over 80 related criminal charges. Kris has successfully argued cases before juries, judges and the Court of Appeal in Toronto. Kris is active in the community as a Director of the Ontario Trial Lawyers Association and the local Brain Injury Association Quinte District. He is a member of the Hastings County Law Association and the Advocates Society. He supports local charities, including the Trenton and Belleville Hospital Foundations.

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