You have most likely heard on the radio or even on the TV about the changes to the accident benefits on your Ontario auto insurance policy. The changes took place in June 2016 for all auto insurance policies in Ontario. Your own broker might have even sat you down and talked to you about buying up the accident benefit limits. If you are like the majority of people with an auto insurance policy though, you still don’t know what these accident benefits even mean. Don’t feel bad about this as there are a lot of insurance professionals out there that don’t fully understand them either. Hopefully this article will clear the air around the difficult subject of accident benefits and what these coverages are.
Accident Benefits Explained
Accident benefits are built into every Ontario automobile insurance policy. These are benefits that you or other insured persons may receive if injured or even killed in an auto accident. These benefits may include coverages such as: income replacement; medical, rehabilitation and attendant care; funeral and death expenses. You can also buy up the limits on these benefits or buy additional accident benefits.
Catastrophic Injuries vs Non-Catastrophic Injuries
Catastrophic injury: Is a serious and life-threatening injury as described in the Statutory Accident Benefits Schedule (legal document). It may involve the loss of use of limbs, complete loss of eyesight, as well as other very serious injuries as defined in the schedule. There is a higher limit of benefits available when the injury is catastrophic. After being assessed or examined, the insurance company will refer to the legal document to determine if your injuries are catastrophic or non-catastrophic. If you like reading very technical legal documents, you can find the full definition on the Ontario.ca website updated June 01, 2016.
Non-Catastrophic injury: Essentially, non-catastrophic injuries are injuries that are less severe than the catastrophic injury category, but also do not fall into the minor injury category.
Minor Injuries: The “Minor Injury Guideline” defines minor injuries as a sprain, strain, whiplash associated disorder, contusion, abrasion, laceration or subluxation (incomplete or partial dislocation of a joint or organ) and any clinically associated sequelae. This term is to be interpreted to apply where a person sustains any one or more of these injuries.
Accident Benefits Broken Down
Attendant Care Benefit: This benefit may compensate you for expenses incurred for an attendant to look after you if you have been seriously injured in an auto accident. This coverage is here for you if the attendant looks after you either at home or within a healthcare facility. This includes transportation for an aide or attendant to accompany the insured person to and from medical and rehabilitation treatments.
Medical and Rehabilitation Benefit: Covers the cost of reasonable and necessary medical and rehabilitation expenses (e.g., physiotherapy) that are not covered by OHIP or your group insurance plan, but which are listed in the Statutory Accident benefits schedule. Other expenses not listed might be covered if they are agreed by the insurer and are seen as essential to your recovery.
Caregiver Benefit: If you are providing full-time care to dependants and can no longer provide that care as the result of a catastrophic injury suffered in an auto accident, you may be eligible for caregiver benefits to reimburse you for your expenses to hire someone to care for your dependants. There is also an optional buy up that would make this coverage available for “all injuries” to make this coverage available for more than just catastrophic injuries.
Housekeeping and Home Maintenance Expenses: This benefit pays for reasonable and necessary additional expenses for someone to complete your household duties if you are unable to complete them due to a catastrophic injury suffered in an auto accident. There is also an optional buy up that would make this coverage available for “all injuries” to make this coverage available for more than just catastrophic injuries.
Income Replacement Benefit: If you cannot work as the result of an auto accident, you may be eligible for basic weekly income replacement benefits of up to $400 (as of the date of this article). This benefit commences one week after the accident occurs. This is calculated using 70% of your gross weekly income up to $400/week. If this is not enough for your gross weekly income, there are optional increases up to $1000/week (as of the date of this article).
Dependant Care Benefit: Pays for additional expenses incurred to care for your dependants if you are employed and are injured in an auto accident and not receiving the Caregiver Benefit.
Death and Funeral Benefit: If you die as a result of an auto accident, the death benefit provides a lump sum payout to your spouse and your dependants. The funeral benefit provides a lump sum payout to cover some of the costs associated with your funeral expenses.
Indexation Benefit: The automatic adjustment of the income replacement benefit, non-earner benefit, attendant care benefit or medical and rehabilitation benefit according to the Consumer Price Index for Canada to compensate for inflation.
Tort Deductible: The amount that is deducted from a settlement or court award for pain and suffering.
Now What Should I Do?
Now that you have a rough idea of what these benefits mean, it may be time to take a look at your own situation. The hardest part about accident benefits for a broker is that every single person will have different needs when it comes to these benefits. It’s almost impossible for your broker to sit you down and tell you exactly what you “should” have for accident benefit buy ups. The most important thing your broker/agent can do is explain what these coverages are and what the limits are for each benefit.
The accident benefit buy up options are not just for the rich. You have to take a look at your own personal situation and see how any of these benefits could help you in your own situation if you were injured in an auto accident. The majority of insurance companies have reasonably priced buy up options and in the long run, they could save you more than a few dollars if you needed to use the benefits.
We tell our friends not to buy the cheapest coffee maker or the cheapest mobile phones on the market because it will cost them more money in the long run. This is the same type of advice we should be giving when it comes to accident benefits on our auto policies. If you want to know more details about the limits on the current accident benefits, please follow this link to a PDF explaining the changes that were made on June 01, 2016 to the accident benefits for all Ontario auto insurance policies. Just remember to give good advice to your friends and steer them to the professionals who can explain each and every benefit available to them. At the end of the day, it’s easier to say “I should have done this sooner” than to say “I wish I would have”.