Posted September 2, 2015

On August 27th, the Ontario Government unleashed chiseled down accident benefit entitlement purportedly as a means to reduce automobile insurance premiums.

While the changes and reductions will surely serve to fatten up an already fat insurance industry, the changes will cause newly injured accident victims, and their families, even further financial and emotional distress, as well as overwhelming hardship.

The legislation, set out in Ontario Regulation 251/15, will reduce total accident benefits available to the most seriously injured motorists in Ontario from $2 million to $1 million.

In addition to cutting the “catastrophic impairment” benefits in half, the legislation overhauls the definition of “catastrophic impairment” (CAT). The overhaul includes the elimination of the popular Glasgow Coma Scale (GCS) test as a means to obtain the crucial CAT designation and adopts an assortment of new CAT tests.

It is not that the replacement CAT tests are inappropriate, but rather that they serve to recreate the wheel – a wheel that finally, after twenty years of litigation, was starting to run smoothly. The new CAT tests will lead to confusion, uncertainty and delays – all impacts that will negatively effect the rehabilitation of seriously injured claimants.

Other legislative changes will reduce the total amount of benefits available to non-catastrophic accident victims from an already reduced total amount of $86,000 (reduced from $172,000 as of September 1st, 2010) to $65,000.

Further, cuts have been made to the duration of non-earner benefits. Students, the unemployed, stay-at-home parents and the elderly will no longer qualify for non-earner benefits indefinitely and will instead only qualify for 2 years’ worth of benefits.

The new legislation will impact claims arising out of accidents that occur on or after June 1st, 2016.

Reduced accident benefit entitlement results in magnified tort claims. Access to reduced accident benefits will lead to expedited tort litigation along with claims against insurance brokers for failing to recommend adequate insurance to motorists. Given these accident benefit reductions, the common $1 million tort liability policy is
undeniably inadequate.

Given these latest reductions, the mandatory automobile insurance system in Ontario simply no longer provides the protection it was designed to provide.

Darcy Merkur is a partner at Thomson Rogers in Toronto practicing plaintiff’s personal injury litigation, including plaintiff’s motor vehicle litigation. Darcy has been certified as a specialist in Civil Litigation by the Law Society of Ontario and is the creator of the Ontario Personal Injury Damages Calculator.
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