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Sep 01 2010
Ontario Auto Reform
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Starting September 1, 2010, new auto insurance reform laws will be introduced in Ontario that will affect Ontario drivers. Canada Brokerlink is committed to informing you of any changes that may impact your insurance policy. The following are common questions and answers regarding Auto Insurance Reform in Ontario. If you have further questions regarding your auto insurance policy, be sure to contact your broker at Canada Brokerlink.
Questions and Answers regarding Ontario Auto Insurance Reform
1. What is Auto Insurance Reform?
Starting September 1, 2010, new laws will be introduced in Ontario that will allow consumers to customize their auto insurance policy to meet their individual needs and budgets. This new program will also help to control some of the factors contributing to increasing claims costs and stabilize the insurance industry.
Drivers in Ontario will have the option to select a new basic level of auto insurance coverage that may reduce the amount paid for auto insurance premiums, or choose additional levels of medical and rehabilitation coverage.
2. Why were these changes made?
These reforms are being made to benefit the consumer and the insurance system as a whole.
In recent years, accident benefit costs have risen due to increasing claims in Ontario. The impact of this increase would have been felt by the consumers, but this new plan will ensure stability and prevent a large-scale increase in premiums. The new program will allow each person to customize their coverage to fit their individual needs and budgets.
Ontario drivers have been paying, on average, 25% more for auto insurance than any other province. With the current program, there is no cap on assessment fees meaning for every dollar spent on treatment another 60 cents is spent on assessments. Unfortunately this program has encouraged abuse and Ontario drivers have been paying for it.
In response to these concerns, the Financial Services Commission of Ontario (FSCO) and the Ontario Provincial Government passed legislation for new standards on auto insurance effective September 1, 2010. Even with the new program, Ontario will still offer the most generous accident benefits coverage in Canada.
3. I’ve just received a notice that my policy will be changing soon, what do I need to do?
You don’t need to do anything right now. Your coverage will be automatically adjusted to the lower standard limits on your next renewal starting September 1, 2010. When you receive your renewal package, you will notice that your coverage may be different, and that is when we can help you make the best decision for your particular circumstances. You will be able to upgrade your coverage by adding some of the coverages back and further, new enhancement options starting September 1, 2010.
For more additional information on these changes, please visit:
4. My notice says I can make changes to my policy prior to its renewal date.
Your current coverage will be maintained at no additional cost until your next renewal, even if your current coverage is above the new basic standard. You are welcome to call us and make changes starting September 1, 2010 and before your renewal. However, we recommend that you leave your coverage as it is now, as any reduction will not necessarily reduce your premium. See chart below.
5. What are the changes?
The following table summarizes the current stand and new accident benefits programs:
| Standard Accident Benefits (Current) | Buy Back Options | Enhancement Options | ||
|---|---|---|---|---|
| Income Replacement | 80% net earning; upto $400/week | 70% net earning; upto $400/week |
70% net earning; upto $600, $800, $1000/week |
|
| Caregiver | $250/week first dependant, plus $50/week additional | $0 (Catastrophic impairment only) |
$250/week first dependant, plus $50/week additional | |
| Housekeeping & Home Maintenance | Upto $100/week | $0 (Catastrophic impairment only) |
Upto $100/week | |
| Dependant Care | $0 | $0 | $0 | $75/week first dependant, plus $25/week additional |
| Medical & Rehabilitation Benefit |
Non Catastrophic: $100,000 & Catastrophic: $1,000,000 |
Minor Injury: $3,500 & Non Catastrophic: $50,000 & Catastrophic: $1,000,000 |
Minor Injury: $3,500 & Non Catastrophic: $100,000 & Catastrophic: $1,000,000 |
Minor Injury: $3,500 & Non Catastrophic: $1,100,000 & Catastrophic: $2,000,000 |
| Attendant Care |
Non Catastrophic: $72,000 ($3,000/mth) |
Minor Injury: $0 |
Minor Injury: $0 |
Minor Injury: $0 |
| Death/Funeral |
$25,000 Spousal |
$25,000 Spousal |
N/A |
$50,000 Spousal |
| Index | None | None | None | Optional |
6. How much extra does it cost to increase my coverage?
Premium amounts are currently being reviewed and approved by the Financial Services Commission of Ontario. Speak with your Canada Brokerlink representative for more information.
7. Should I buy the extra coverage, do I need it?
We recommend you speak with a disability insurance advisor to assist you in determining your needs and review how this coverage compares to any other coverage you may or should have. Your Canada Brokerlink broker will advise you on the current levels of coverage provided and the changes being made.
You need to determine how this affects you and how it compliments other coverage you may have, either privately or through a plan with your employer.
You may need additional coverage if:
- You have no workplace/private Long Term Disability plan, or your spouse/life partner doesn’t have coverage.
- You are self employed.
- If there are deficiencies or gaps in your workplace Long Term Disability plan.
Remember, these benefits protect you in the event of an automobile accident only.
8. Can I expect to pay less for car insurance under the new plan?
No. The legislation has been designed to reduce the amount paid on accident benefit costs and not to lower insurance premiums. There may be a future impact to insurance premiums as claim payouts stabilize, however every individual is different and the amount of premium you pay will depend on your driving history.
9. What happens if I buy another car or if I change my current vehicle?
As long as all of your vehicles are insured with the same insurer, you will continue to receive your existing benefits until your next renewal. All vehicles written on a single policy must have the same statutory accident benefits schedule (SABS) coverages and levels.
10. Will all of my coverages remain the same until my next renewal?
Yes, your coverage will remain the same until your next renewal. However, after September 1, 2010 there will be limitations in place.
New processes for claims occurring on or after September 1, 2010 will take effect, regardless if your policy has renewed, including:
- $3,500 cap for medical and rehabilitation assessment and examination costs.
- $2,000 cap for any assessment.
- Elimination of rebuttal examinations.
Written by Alex K., Cathy Y. & Gary B.