Effective June 1, 2016, the Financial Services Commission of Ontario (FSCO) will institute changes to the province’s automobile insurance system. These changes will apply only to auto insurance policies issued or renewed on or after the effective date. Existing policies will remain subject to the current limits until they are terminated or renewed.
The reforms aim to make premiums more affordable and provide consumers with more choice in the insurance coverages they can select. Specifically, the revisions include, but are not limited to, the following:
Medical rehabilitation and attendant care benefits for non-catastrophic injuries.
- New policy: For catastrophic impairment claims, a new combined medical, rehabilitation and attendant care benefit of $1 million will be available.
- Current policy: Current policies provide two separate limits of $1 million for medical and rehabilitation benefits and for attendant care benefits for catastrophic impairment claims.
- New policy: The duration of receiving non-earner benefits has been changed to a maximum of two years, following a four-week waiting period.
- Current policy: There are currently no set durations on receiving non-earner benefits, provided the applicant qualified for them and the six-month waiting period was met.
As part of the reforms, a number of optional benefits are available to consumers:
- For combined medical, rehabilitation and attendant care benefits, policyholders can opt for up to $130,000 in benefits in addition to the optional $1 million currently available.
- An additional $1 million is also available to those who sustain a catastrophic impairment under the combined medical, rehabilitation and attendant care benefits.
- It should be noted that, with these changes, the $100,000 medical and rehabilitation benefits and the $72,000 attendant care benefits options have been eliminated.
Interest rate for monthly premium payments.
- The maximum amount that can be charged for monthly premium payments has been lowered from 3 per cent to 1.3 per cent for one-year policies, with corresponding reductions for shorter terms. This applies to contracts issued or renewed on or after the effective date.
- For any policy issued or renewed on or after the effective date, the standard deductible for comprehensive coverage will increase from $300 to $500.
- An insurer may not consider minor accidents occurring on or after the effective date when issuing, renewing or cancelling a contract when:
- The cost of the damages to all vehicles involved in an accident does not exceed $2,000 and is paid for by the at-fault party.
- No injuries occur as a result of the accident.
- No payment is made by an insurer for any damages resulting from the accident.
- The definition of catastrophic impairment includes new criteria related to traumatic brain injuries for adults and children, amputations, ambulatory mobility, loss of vision, and mental and behavioural impairments. These changes are meant to reflect current medical information and better identify policyholders that have been seriously injured. In essence, the definition of catastrophic impairment has been narrowed and directly impacts how a number of Statutory Accident Benefits are distributed.