Personal Injury Resources
FSCO Recommends Changes to Insurance to Protect Victims
Date :
2009-04-24
Regulators have recommended several key changes to Ontario car insurance laws in a report released late last month, some of which would help simplify the process of applying for accident benefits and improve the compensation for victims.
The 72-page report was released by the Financial Services Commission of Ontario (FSCO) following a five-year review of Ontario auto insurance coverage, and provided some 39 recommendations to the Ontario government.
Of these, several related to accident benefits available to victims of a motor vehicle accident. Under Ontario law, anyone who is injured in a car accident anywhere in the province is entitled Statutory Accident Benefits.
These benefits are a mandatory part of all car insurance, and even victims of an accident where there is no car insurance involved will receive benefits from a special fund called the Motor Vehicle Accident Claims Fund.
Coverage includes prescribed medical expenses, income replacement, medical assistance, housekeeping and many more of the costs that can stem from a car accident injury.
However, the report noted that despite efforts to streamline the process over the past 20 years, applying for accident benefits is a lengthy and complicated affair today, and many victims are forced to ask their doctors for help in filling out numerous forms.
Most people seeking compensation for pain and suffering will retain the services of an accident attorney, to ensure they are not denied their personal injury claims because of a bureaucratic misstep, the report pointed out.
The report noted that many victims are being unfairly delayed or denied in the their claims, and set out some key proposals to protect consumers without unfairly burdening the system.
One of the biggest proposed changes from the victims’ point of view would be lowering the tort deductible levels. Currently, anyone who suffers from a serious and permanent impairment (such as paralysis) can seek damages for suffering and lost wages, as can the family members of a fatal accident victim, but those damages are subject to deductibles of up to $30,000.
The FSCO report concluded that these deductibles were seen as unfair by many accident victims, and in some cases might even prevent them from undertaking the process altogether.
“Consumers indicated that too many innocent accident victims are denied access to the courts as a result of the deductibles,” read the report. “In addition, for those that are able to sue for pain and suffering damages, the reduction in their awards was unfair. It is clear that many consumers do not feel the current deductible levels are fair.”
The report recommended the maximum deductible be lowered to $20,000, and removed altogether in the case of a fatal accident.
The report also recommended that the definition of a ‘catastrophic impairment’, which would allow a person to sue for a higher level of damages, be amplified “to ensure that the most seriously injured accident victims are treated fairly.” It concludes that current assessment guidelines are not well defined, and may unfairly exclude some victims from seeking just compensation.
Under the Statutory Accident Benefits Schedule (SABS), victims who are unable to work because of an injury sustained during a car accident may also be entitled to income replacement benefits. Currently, the maximum weekly benefit is capped at $400, a figure set in 1996; the report also increasing the maximum weekly income replacement benefit to $500 to better reflect current income and cost of living.
“Since its introduction, the percentage of earners who fall below the benefit maximum has dropped considerably,” reads the report. “The increase would bring coverage back to 1996 levels.”
The report identified another weakness in the current system that allows disputes between insurance companies involved in a car accident to deflect and delay payment of benefits to victims.
These disputes can center around which insurance company is liable, to the definition of an ‘insured dependent’, to the accuracy of completed claim forms. Many of these cases have gone to court, and a number of rulings have criticized insurance companies for their handling of such cases.
While there are rules set out to identify which insurance company is liable in any given scenario, the report notes that “difficulties have emerged in resolving disputes between companies over which insurer was liable to pay … Often, claimants who were entitled to accident benefits received no benefit payments until the resolution of this dispute.”
Such delays are directly contrary to the nature of Ontario’s no-fault accident legislation, notes the report.
“One key objective of Ontario’s no-fault accident benefit system is to meet claimants’ immediate needs following an automobile accident and provide prompt payment of benefits without regard to fault,” reads the report. “Without a system of prompt payments, claimants could be left without the ability to pay for ongoing household and living expenses and medical and rehabilitation costs resulting from an accident.”
The report goes on to recommend changes to the relevant regulations to make it more difficult for insurers to deflect or delay claims payments.
One more troublesome recommendation made in the report is the requirement of rehabilitation referrals by a ‘single health care practitioner’, in most cases the claimant’s primary physician.
While the report notes that “the increased involvement of physicians is not expected to impact on the doctor shortage in Ontario”, some are concerned that many people, particularly in the GTA (including Toronto, Mississauga, Brampton, Richmond Hill, Scarborough and Markham) where there is a dire shortage of family physicians, do not have access to a family doctor, relying instead on walk-in clinics and making the requirement of a single practitioner’s involvement next to impossible.
“There are many Ontario residents who do not have access to a family physician, and requiring a referral for treatment would be contrary to the Regulated Health Professions Act," pointed out Dorianne Sauvé, chief executive of the Ontario Physiotherapy Association.
The 72-page report was released by the Financial Services Commission of Ontario (FSCO) following a five-year review of Ontario auto insurance coverage, and provided some 39 recommendations to the Ontario government.
Of these, several related to accident benefits available to victims of a motor vehicle accident. Under Ontario law, anyone who is injured in a car accident anywhere in the province is entitled Statutory Accident Benefits.
These benefits are a mandatory part of all car insurance, and even victims of an accident where there is no car insurance involved will receive benefits from a special fund called the Motor Vehicle Accident Claims Fund.
Coverage includes prescribed medical expenses, income replacement, medical assistance, housekeeping and many more of the costs that can stem from a car accident injury.
However, the report noted that despite efforts to streamline the process over the past 20 years, applying for accident benefits is a lengthy and complicated affair today, and many victims are forced to ask their doctors for help in filling out numerous forms.
Most people seeking compensation for pain and suffering will retain the services of an accident attorney, to ensure they are not denied their personal injury claims because of a bureaucratic misstep, the report pointed out.
The report noted that many victims are being unfairly delayed or denied in the their claims, and set out some key proposals to protect consumers without unfairly burdening the system.
One of the biggest proposed changes from the victims’ point of view would be lowering the tort deductible levels. Currently, anyone who suffers from a serious and permanent impairment (such as paralysis) can seek damages for suffering and lost wages, as can the family members of a fatal accident victim, but those damages are subject to deductibles of up to $30,000.
The FSCO report concluded that these deductibles were seen as unfair by many accident victims, and in some cases might even prevent them from undertaking the process altogether.
“Consumers indicated that too many innocent accident victims are denied access to the courts as a result of the deductibles,” read the report. “In addition, for those that are able to sue for pain and suffering damages, the reduction in their awards was unfair. It is clear that many consumers do not feel the current deductible levels are fair.”
The report recommended the maximum deductible be lowered to $20,000, and removed altogether in the case of a fatal accident.
The report also recommended that the definition of a ‘catastrophic impairment’, which would allow a person to sue for a higher level of damages, be amplified “to ensure that the most seriously injured accident victims are treated fairly.” It concludes that current assessment guidelines are not well defined, and may unfairly exclude some victims from seeking just compensation.
Under the Statutory Accident Benefits Schedule (SABS), victims who are unable to work because of an injury sustained during a car accident may also be entitled to income replacement benefits. Currently, the maximum weekly benefit is capped at $400, a figure set in 1996; the report also increasing the maximum weekly income replacement benefit to $500 to better reflect current income and cost of living.
“Since its introduction, the percentage of earners who fall below the benefit maximum has dropped considerably,” reads the report. “The increase would bring coverage back to 1996 levels.”
The report identified another weakness in the current system that allows disputes between insurance companies involved in a car accident to deflect and delay payment of benefits to victims.
These disputes can center around which insurance company is liable, to the definition of an ‘insured dependent’, to the accuracy of completed claim forms. Many of these cases have gone to court, and a number of rulings have criticized insurance companies for their handling of such cases.
While there are rules set out to identify which insurance company is liable in any given scenario, the report notes that “difficulties have emerged in resolving disputes between companies over which insurer was liable to pay … Often, claimants who were entitled to accident benefits received no benefit payments until the resolution of this dispute.”
Such delays are directly contrary to the nature of Ontario’s no-fault accident legislation, notes the report.
“One key objective of Ontario’s no-fault accident benefit system is to meet claimants’ immediate needs following an automobile accident and provide prompt payment of benefits without regard to fault,” reads the report. “Without a system of prompt payments, claimants could be left without the ability to pay for ongoing household and living expenses and medical and rehabilitation costs resulting from an accident.”
The report goes on to recommend changes to the relevant regulations to make it more difficult for insurers to deflect or delay claims payments.
One more troublesome recommendation made in the report is the requirement of rehabilitation referrals by a ‘single health care practitioner’, in most cases the claimant’s primary physician.
While the report notes that “the increased involvement of physicians is not expected to impact on the doctor shortage in Ontario”, some are concerned that many people, particularly in the GTA (including Toronto, Mississauga, Brampton, Richmond Hill, Scarborough and Markham) where there is a dire shortage of family physicians, do not have access to a family doctor, relying instead on walk-in clinics and making the requirement of a single practitioner’s involvement next to impossible.
“There are many Ontario residents who do not have access to a family physician, and requiring a referral for treatment would be contrary to the Regulated Health Professions Act," pointed out Dorianne Sauvé, chief executive of the Ontario Physiotherapy Association.
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Brampton, Ontario
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