Unless you’re a lawyer or are familiar with insurance laws you probably don’t understand the car insurance coverage you have or need.
This situation will only get worse come Sept. 1, 2010 when Ontario’s new no-fault benefits laws come into force.
If you are in a car accident, you’re entitled to make a claim for no-fault benefits. These benefits cover such things medical and rehabilitation costs, income loss, caregiver and housekeeping expenses.
As of Sept. 1, these benefits will be restricted and reduced save in cases of catastrophic injury.
If you have car insurance, the claim for no-fault benefits is made against your insurer, not the insurer of the other vehicle, regardless of who caused the accident.
If you are a pedestrian or cyclist and involved in a car accident but don’t have car insurance, the claim for no-fault benefits is made against the insurer of the car.
Aside from a claim for no-fault benefits, you can also sue the other driver or owner for negligence and claim money for such things as pain and suffering, loss of enjoyment of life, future loss of income and additional medical rehab payments not included in the no-fault benefits.
But the law doesn’t permit such a claim unless your injuries are “serious and permanent”.
Worse an automatic $30,000 is deducted from any award under $100,000 (although you can pay an extra premium up front and the $30,000 is lowered to $20,000).
To qualify as serious and permanent, the harm must be permanent and the injury must substantially interfere with one’s ability to continue with their employment, or substantially interfere with most of one’s usual daily activities.
That prejudices retirees, children, students and the unemployed, according to personal injury lawyer Adam Wagman.
Since most claims don’t involve injuries that meet the definition of serious and permanent, accident victims are usually left with a claim for only no-fault benefits.
That’s why you need to know the precise amount of these benefits so you can decide if you have adequate coverage.
Ontario’s insurance regulator, the Financial Services Commission of Ontario, has ordered car insurers to explain the massive changes looming for car owners effective Sept. 1.
You’ll soon be receiving a document titled Changes to Ontario Auto Insurance Give You More Choice.
What “more choice” means is your coverage is automatically reduced, but you’ll have the option of paying additional premiums to beef up your no-fault benefits.
But chances are very few will sign up for increased coverage.
According to personal injury lawyer Darcy Merkur, approximately 3% of car owners have purchased the currently available optional coverage and “it is unrealistic to think that motorists will suddenly understand the need to purchase optional coverage to properly protect themselves in the event of a motor vehicle accident.”
But if you don’t purchase optional coverage and are in an accident after Sept. 1, you’ll have far fewer benefits.
Worse, if you don’t own a car and don’t have car insurance, you’ll have no ability to purchase the optional coverage.
According to Patrick Brown, past president of the Ontario Trial Lawyers Association, the new law “creates an injustice” for pedestrians, cyclists and public transit users who don’t own a car.