Further reforms are being made to the Ontario auto insurance system beginning June 1st, 2016. These include changes to the Statutory Accident Benefits coverage, a new catastrophic impairment definition, and a number of other small changes. Existing policies will remain subject to the current limits until they are terminated or renewed.
It has been reported that the purpose of the reforms are to help make premiums more affordable and provide consumers with more choice in the insurance coverage selected. We don’t anticipate a reduction in rates but rather just stabilization. Also “more choice” may be a little misleading as there is only one additional option along with new lower standard benefits. Specifically, the revisions include, but are not limited to, the following:
Combining the Medical & Rehabilitation and Attendant Care Benefit into a single combined limit where currently they are separate:
For Non-catastrophic Injuries the combined limit will be $65,000 (currently, Attendant Care is separate at $36,000 and Medical & Rehabilitation at $50,000). Consumers will have the option to increase the combined Non-catastrophic Benefit to $130,000;
For Catastrophic Injuries the combined limit will be $1,000,000 (currently, Attendant Care is separate at $1,000,000 and Medical & Rehabilitation at $1,000,000). Consumers will have the option to increase the combined limit to $2 million;
Here is the one new choice. Increase the combined limits for Non-Catastrophic Injuries to $1,000,000 and Catastrophic Injuries to $2,000,000;
Reducing the standard duration for Medical and Rehabilitation Benefits from 10 years to 5 years;
Reducing the six-month waiting period to four weeks and limiting the duration to two years from the accident for the Non-Earner Benefit.;
Goods and services not explicitly listed in the Statutory Accident Benefits Schedule (SABS) will need to be agreed to by the insurer;
A new definition of catastrophic impairment which includes updated definitions and criteria for traumatic brain injuries for adults and children, amputations, ambulatory mobility, loss of vision, and mental and behavioral impairments, and introduces a new process for combining physical with mental and behavioral impairments.
Some other important changes are:
Changing the standard deductible for Comprehensive coverage from $300 to $500.
Lowering the interest rate for monthly payment plans from 3% to 1.3%.
Minor accidents under $2,000 that aren’t claimed to any insurer can no longer be used as a factor in rating premiums. This will apply to accidents occurring on or after June 1, 2016.