2016 Ontario Auto Insurance Reforms

What Is Happening?

Auto insurance is a regulated product in Ontario. Every few years the Ontario government reviews auto insurance and mandates changes to the product and product offerings available to Ontario drivers. Recent changes made by the government, effective June 1, 2016, are intended to help keep insurance premiums affordable and to provide you with more choice and flexibility to purchase the coverage that meets your needs.

Do I need to do anything right now?

No. The 2016 Ontario Auto Reforms will impact policies with an effective date on and after June 1st 2016. You do not need to do anything immediately. When your car insurance renewal comes up, Allstate customers will be provided with more information about the Ontario Reform changes mandated by the government and the coverage options available to them. Check out the GOOD HANDS® blog for a calendar tool to help remind you of when action will be needed.

Why does any of this matter?

Waiting until something happens to evaluate whether or not you have the right coverage on your auto insurance may be too late. So when you renew your policy this year after the 2016 Auto Insurance Reforms come into effect on June 1, take the opportunity to step back and reflect on the coverage that you and your family may need.

If you have children / elderly parents that depend on you,
who would care for them if you were seriously injured?

If you had to hire someone to carry out household responsibilities,
how would you pay for these additional expenses?

Standard policies are just that: standard. While auto insurance products are becoming more affordable for consumers, gaps might exist depending on your lifestyle and needs. There are opportunities to fill those gaps by purchasing increased coverage or adding options to cover specific areas of your life in the event the unexpected happens.

What are some of the changes in these reforms?

The main changes to the auto insurance product with the new 2016 Ontario Auto Reforms are  

  1. Medical, Rehabilitation and Attendant Care benefits limits and benefit period are being changed.
  2. The maximum interest rate that can be charged for monthly premium payment fees has been lowered from 3 per cent to 1.3 per cent for one year policies, with a corresponding reduction for policies with a shorter term.
  3. The standard deductible for Comprehensive coverage has been increased from $300 to $500.
  4. Insurers can no longer use a minor at-fault accident meeting certain criteria for underwriting or rating purposes. 
  5. The six month waiting period for people who are not working and apply for non-earner benefits has been reduced to four weeks. Non-earner benefits can only be received for up to two years after the accident.
  6. For all claimants, except children, the duration of medical/rehabilitation and attendant care benefits is now five years for non-catastrophic injuries. As always, these benefits will be paid only as long as you remain eligible to receive them.

Understanding the 2016 Ontario Auto Reform changes and how they impact you

Getting a better understanding how insurance works is the first step. Your auto insurance may provide a range of benefits not covered by OHIP or any personal and/or group health coverage you may have. Some examples are:

  • medical, rehabilitation and attendant care expenses
  • income replacement
  • caregiver benefits
  • dependant care benefits
  • housekeeping/home maintenance assistance

The changes to your auto insurance policy being made in the 2016 Ontario Reforms give you flexibility to choose the coverage that fits your lifestyle and needs. The information below is for illustrative purposes only, but offers a bit of a primer on how auto insurance works, and will help you in determining the coverage you may need.

What do these changes mean to my premium? How much more (or less) will I pay?

Your premium depends on your individual circumstances and the level of coverage you choose to best protect yourself and your family. You should speak to your agent about the impact that these changes have on your coverage and premium. 

1. Medical, Rehabilitation and Attendant Care Benefit

Reimbursement for medical and rehabilitation expenses

If you are in an accident, this benefit provides reimbursement for reasonable, necessary medical and rehabilitation expenses like physiotherapy, and reimbursement for an attendant to look after you either at home or in a healthcare facility. The auto insurance policy would pay for expenses not covered by OHIP or an Individual and/or Group Insurance Plan(s).

 

Benefit

Current Limits

New Limits

Consumers can choose

Medical and Rehabilitation for non-catastrophic injuries

$50,000

These benefits have been combined and reduced to $65,000 total

Increase the benefit to $130,000 for non-catastrophic injuries

Attendant Care for non-catastrophic injuries

$36,000

Medical and Rehabilitation for catastrophic injuries

$1,000,000

These benefits have been combined and reduced to $1,000,000 total

An additional $1,000,000 for a total of $2,000,000 for catastrophic injuries

Attendant Care for catastrophic injuries

$1,000,000

Medical, Rehabilitation and Attendant Care for non-catastrophic and catastrophic injuries

Increase the combined non-catastrophic benefit to $1,000,000 and Increase catastrophic benefit to:

  1. $2,000,000 or 
  2. $3,000,000

Medical, Rehabilitation for minor injury

$3,500

The $3,500 Limit combined for Medical, Rehabilitation and Attendant Care

Not applicable. Benefits for minor injuries are fixed at a maximum limit of $3,500

Attendant Care for minor injury

Not available


So how do I choose the right limits?

Consider what you may need. For example, what if you have a young child in your household who is catastrophically injured in a motor vehicle accident? You may need to provide full-time attendant care to him or her for life. At $5,000 to $6,000 per month, the Standard $1 Million Benefit will last 13-17 years only. If this could be a possibility, you should consider increasing your coverage to $2 Million or $3 Million.

Another example, if you drive in the United States and have a motor vehicle accident there, you may need medical care in an American facility. The Standard Benefit Limits may not be enough to cover these expenses, and you could benefit from having   increased coverage limits.

While we know it is impossible to predict the future, it’s important to consider options.

2) Caregiver Benefit

Reimbursement to hire someone to care for your dependants if you are in an accident

If you are the primary caregiver to dependants and you can no longer provide that care as the result of a motor vehicle accident, you may be eligible for caregiver benefits to hire help.

The current coverage is only for catastrophic injuries*. You can get at the most $250 per week for the first dependant and an additional $50 per week for each additional dependant.

But what if I my injury is considered “non-catastrophic”?
You can now extend the caregiver benefit to cover Non-Catastrophic injuries

3) Income Replacement

This benefit compensates you and others for lost income

If you were injured in a motor vehicle accident and couldn’t work, what sources of income would be available to you to cover your living expenses like your mortgage or rent, food, utilities, and basic sundries? This benefit in your auto insurance provides coverage of up to 70% of your gross weekly income to a maximum of $400.

But this may not be enough…

If your income is more than $30,000 a year, then $400 a week coverage may not be enough. You can increase the weekly maximum to $600, $800, or even $ 1,000 per week.

Weekly benefit up to 70% of Gross Income

Maximum Weekly Benefit

Maximum Annual Benefit

Equates to a Maximum Gross Income of

$ 400

$ 20,800

$ 29,714

$ 600

$ 31,200

$ 44,571

$ 800

$ 41,600

$ 59,429

$ 1,000

$ 52,000

$ 74,286


4) Housekeeping and Home Maintenance Expenses

Reimbursement for someone to carry out your household responsibilities

If you or someone in the household normally does the cleaning and maintenance of your home, you need to consider who will look after these things if that person is injured in a motor vehicle accident.  Your auto insurance provides up to $100 per week for catastrophic injuries*.

What about injuries not considered catastrophic?
You can extend coverage to non-catastrophic injuries as well.

5) Dependant Care

Reimbursement for additional expenses to care for your dependants if you’re employed and injured from a car accident

If you are employed and injured in a car accident and not receiving Caregiver Benefits, but have others dependant on you for their care and well-being, you can purchase this optional coverage.

What kind of coverage can I get?
You can purchase up to $75 per week for your first dependant and $25 per week for each additional dependant to a maximum of $150 per week.

6) Death and Funeral

A benefit to the spouse and dependants in case of death, plus coverage for funeral expenses

If you were killed in a car accident, what financial resources would be available to your family to maintain their standard of living and pay for expenses like the mortgage/rent, loan payments, food, and tuition? Your car insurance provides a basic benefit of $25,000 to your surviving spouse and $10,000 to each additional dependant, along with a $6,000 funeral expense benefit.

But this may not be enough…
You can opt to double the death benefit to $50,000 for your spouse and $20,000 to each dependant. The funeral expense benefit can be increased to $8,000.

7) Indexation

Adjustment of benefits to account for changes in inflation.

The cost of living increases every year because of inflation. The weekly or monthly benefits you receive through auto insurance coverage are fixed.

I don’t think my benefits will be enough because things become more costly over time
You have the option to have any weekly or monthly benefit amounts you’d qualify for keep pace with inflation.

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We’re here to help

Rest assured, with Allstate you have a team you can trust and personalized care and advice to help ensure you have the right coverage. When you receive your auto policy renewal from Allstate, effective June 1, 2016 or later, review your coverage and contact your Allstate Agent to discuss the changes and make any adjustments you require.

How can I get more information?

If you have more questions about these changes please contact your local Allstate agency http://locator.allstate.ca/en/ or email us at corporaterelations@allstate.ca. You can check also out www.fsco.gov.on.ca or www.ibc.ca.

Summary of the Accident Benefit coverage changes being made to your auto insurance policy by the 2016 Ontario Reforms

 

Accident Benefit Coverage

Prior to June 2016

As of June 2016

Options

Medical, Rehabilitation and Attendant Care Benefit

Medical + Rehabilitation:

Reimbursement for reasonable, necessary medical and rehabilitation expenses like physiotherapy not covered by OHIP or Group Insurance Plans

Attendant Care:
Reimbursement for an attendant to look after you either at home or within a healthcare facility

Minor Injury: Sprains, strains, whiplash, cuts, bruises, etc.

Non-Catastrophic
Injuries:

Any injury that does not meet the Catastrophic Injury or Minor Injury description

Catastrophic Injuries: Loss of a limb, para/quadraplegia

$50,000 for Medical + Rehabilitation (for Non- Catastrophic injuries)

 

$36,000 for Attendant Care (for Non-Catastrophic Injuries)

 

$1,000,000 for Medical

+ Rehabilitation (for Catastrophic Injuries)

 

$1,000,000 for Attendant Care (for Catastrophic Injuries)

$65,000 total for Medical,

Rehabilitation and Attendant Care (for Non-

Catastrophic Injuries)

 

$1,000,000 total for Medical, Rehabilitation and Attendant Care (for Catastrophic Injuries)

Increase to $130,000 (for Non-Catastrophic Injuries)

 

Increase to $2,000,000 (for Catastrophic Injuries)

 

Increase to $1,000,000 (for Non-Catastrophic Injuries); increase to $2,000,000 (for Catastrophic Injuries) to total $3,000,000

Caregiver Benefit

Reimbursement to hire someone to care for your dependants.

Up to $250/week for first dependant, $50/week for additional dependants; for catastrophic Injuries only

No Change

Extend benefit to cover all injuries and not just catastrophic injuries

Housekeeping & Home Maintenance Expenses

Reimbursement for someone to carry out your household responsibilities

Up to $100/week(Catastrophic injuries only)

No Change

 

Extend benefit to cover all injuries and not just catastrophic injuries

 

Income Replacement Benefit

Provides a basic weekly income beginning one week after an accident occurs.

70% of gross income up to $400/week

No Change

Increase to $600, $800 or $1,000/week

Dependant Care Benefit

Reimbursement for additional expenses to care for your dependants if you’re employed and injured from a car accident.

Not Provided

No Change

Purchase up to $75/week for first dependant and $25/week for additional dependants (max $150/week)

Death & Funeral Benefit

A lump sum payout to your spouse and dependant(s); a second lump sum payout to cover the cost of funeral expenses.

$25,000 to an eligible spouse; $10,000 to each dependant; up to $6,000 for funeral

No Change

Increase to $50,000 for eligible spouse; $20,000 for each dependant; max $8,000 for funeral

Indexation Benefit

Adjustment of benefits to account for changes in inflation.

Not Provided

No Change

Adjust annually according to the Consumer Price Index of Canada

Tort Deductible

The amount deducted from a settlement or court award for pain and suffering.

$36,905.40 deductible for court awarded compensation for pain and suffering (Jan 1- Dec 31, 2016)

No Change

Reduce deductible by

$10,000 regardless of annual indexation percentage increases.


Effective June 1st, 2016


*
Catastrophic Injury: Permanent paralysis of both legs or legs and arms; loss of use or amputation of one arm or leg; total loss of vision in both eyes; severe head injury resulting in permanent coma; impairment of 55% or more of the whole person; extreme impairment due to mental or behavioural disorder.
Non-catastrophic Injury: Any injury that does not meet the Catastrophic Injury or Minor Injury description
^Minor Injury: Sprains, strains, whiplash, cuts, bruises, etc.