MORE AUTO INSURANCE WOES

This memo is an addendum to our Memo #20 (Your Motor Vehicle Accident Claim). It outlines changes to automobile insurance in Ontario effective October 1, 2003 as a result of "Bill 198" and recent Regulations. With a view to controlling auto insurance premiums, the Ontario Government has again reduced the rights of innocent victims of motor vehicle collisions, and worse, added more complexity to the already byzantine Statutory Accident Benefits (SAB, or "no fault") regime.

"Whiplash" Injuries: More Acronyms

If you have a whiplash-type injury (WAD = "Whiplash Associated Disorder"), now pre-defined in terms of "WAD I"(minor) and "WAD II" (very serious), your insurer will only pay for a specified number of treatments, 9 and 20 treatments respectively, for specified fees. The alleged benefits are early intervention, administrative savings, and "greater certainty for patients and service providers." The complex scheme of deadlines (e.g. you fail to report the accident within 7 days, you are penalized by reduced length of treatment), the allegedly simplified (but in fact, very detailed) forms involved, and the detailed list of service and fees make this a minefield for the injured party, and for his or her physician.

Catastrophic Impairment: more verbiage

Since 1996, the SAB benefits available to minor and seriously injured victims have been capped. Victims who have suffered "catastrophic impairment", however, are eligible for vastly increased benefits. There is a detailed definition of the phrase. This definition has now been revised, creating more verbiage and, in this writer's opinion, more grounds for insurers to deny coverage. However, one positive step has been to require an assessment of impairment within two years, instead of three years, for victims of accidents occurring after October 1, 2003.

Health Care Expenses

Before Bill 198, the victim could not claim health care expenses as damages in the "tort" claim. Now the victim can. This is a major positive step for the victim, who was otherwise at the mercy of the SAB system.

Increased Monetary Thresholds

The deductibles for damages for pain and suffering, and for Family Law Act damages have been doubled, probably to prevent a threatened 8% increase in insurance premiums. The victim now has a deductible of $30,000.00 for his or her pain and suffering, and the family members now have a deductible of $15,000.00 each - UNLESS the amount of such damages exceeds $100,000.00 and $50,000.00 respectively, in which case, the deductible is waived. The increased deductible is nevertheless, in this writer's view, an incredible blow to seriously injured victims and their families. If a jury found felt that you should receive $60,000 for pain and suffering from a serious injury, you would receive only $30,000. Remember, in Canada, the highest amount of damages you can receive for pain and suffering-even for a quadriplegic-is about $290,000 at this time. A $60,000.00 award reflects significant injuries. The intended effect is clear: think twice before bringing claim even for serious injuries.

The Verbal Threshold: The Same-or is it?

The dividing line between minor and serious injuries is basically "permanent serious impairment of an important physical, mental, or psychological function." If this verbal threshold is met, then damages for pain and suffering can be claimed for an injury. But Bill 198 allows the government by regulation to "define" the latter phrase! Just prior to the recent election, the government released proposed regulations that did indeed "define" the threshold. For example, it tied the impairments to ability to continue employment. It is unlikely that this regulation will now be passed, but ANY "definition" by its nature is bound to narrow the meaning, create further complexity, and encourage litigation.

Assessment and Treatment Plans

The SAB regulations in 1996 and earlier brought in a whole system of detailed forms. Among the most important are Assessment Plans and Treatment Plans. The new Regulations allegedly simplify them. This writer and others disagree. A small example: now a Treatment Plan, formerly signed by the health care provider, requires the signature of the victim-meaning, presumably, another visit to the doctor's office.

More DACs

DAC (Designated Assessment Centre) entered insurance lingo in 1994. Since that time, these institutions have proliferated, giving jobs or extra income to all sorts health professionals for "assessment" instead of treatment. Bill 198 only tinkers with them. For example, there will be a new "Fast Track DAC". The paperwork production from these centres is monumental. The DAC providers are paid by insurers most of the time-and the results generally reflect that fact.

Summary

Automobile insurance in Ontario is a mess. This is the result of various forces, particularly our demand for lower rates. Bill 198 and the Regulations are, in this writer's submission, stop-gap measures. We need to divest ourselves of the enormous and wasteful "health" and insurance bureaucracy living off the savings generated from reduced compensation for victims. In the meantime, however, an innocent motor accident victim faces a complex system, and needs legal assistance to help navigate the maze. At Fleury, Comery LLP, Greg McConnell is experienced in motor vehicle litigation for plaintiffs. Please do not hesitate to consult us if you or a family member have been seriously injured in a car accident.

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Updated: November 2008