Insurance coverage

When Your Insurance Policy Comes Into Play

Beginning June 1stauto insurance policies in Ontario will change. The most significant update is the change in Accident Benefit coverage. If you’ve been injured in a car accident, Accident Benefits cover expenses like rehabilitation. Typically we assume medical expenses are covered by OHIP, but in the event of injury from a car accident, your insurance policy comes into play.

Arguably the most important Accident Benefit, Medical Rehabilitation covers necessary medical and rehabilitation expenses like physiotherapy. Under the current structure, non-catastrophic injury coverage is $50,000 (sprains, whiplash, broken bones) and catastrophic injury coverage is $1,000,000 (loss of limb, para/quadriplegia). A second benefit called Attendant Care covers the cost of a professional to look after you either at home or within a healthcare facility. Coverage is $36,000 for non-catastrophic injuries and $1,000,000 for catastrophic injuries. As separate benefits, it’s common for one benefit to be underutilized and the other over utilized (the Attendant Care benefit can’t be accessed unless a professional’s involved in your care).

As of June 1st, these benefits will be combined into one. The (new) Medical, Rehabilitation and Attendant Care benefit is single coverage for everything that falls within this category. Under the new system, all funds are available, allowing greater flexibility – whether you have a family member, friend or paid professional taking care of you, funds can be accessed. But total coverage will be reduced: non-catastrophic injury coverage will be $65,000, and catastrophic injury coverage will be $1,000,000. Total. All medical, rehabilitation and professional care expenses included. There’s a very real possibility individuals will reach their maximum benefit level and exhaust available funds, especially in the case of catastrophic injury.

So how do you figure out if you’ll need more coverage?

For one thing, Accident Benefit coverage encompasses much more than you might think. Beyond rehab, it includes mobility devices like wheelchairs and crutches and transportation mediums like accessible vehicles; it also includes renovations in the instance your home requires modification to accommodate an injury. Becoming informed on what’s included might get you thinking about how you’d finance these items if your insurance policy didn’t. A few sample costs:

* Rehab Team Services: $3,500–$4,000/month
* Prosthetic Limb: $10,000–$20,000/3–5 years
* Manual Wheelchair: $5,000–$10,000/5 years
* Power Wheelchair: $15,000–$25,000/5 years
* Accessible Vehicle: $100,000+
* Professional Attendant Care (8 hrs/day): $7,000/month
* Home Renovations: $100,000–$400,000
  Source: Ontario Rehab Alliance

You can also ask yourself a few questions – how vulnerable are you to injury (consider your age, general health and any pre-existing conditions), and would you be more vulnerable to slower recovery? Do you have insurance from other sources (like employment benefits)? Be aware of any limitations you might have and get informed on how to work with them.

When the Ontario government altered auto insurance in 2010, 90% of consumers chose standard coverage instead of tailoring the product to cover their unique circumstances. With these changes, considering what’s available is crucial. It’s relatively inexpensive to increase coverage, so talk to your insurance broker about coverage gaps and how they might be avoided – they’ll ensure you have the right coverage so you and your family are covered in the event of an accident.


8 Comments

Great Blog post thanks. Respectfully, should there not be more emphasis on when the coverage is triggered? I believe that WSIB and Employee Benefits schemes would be primary to this coverage. Correct? You do mention other available insurance but don’t indicate if other insurance is primary.

May 24 | 09:16
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    by IBAO

    Thanks Simon. Priority of coverage, or the order defining which policy benefits are drawn from, can be confusing. The order is dependent on many variables – what other insurance policies you have, who was injured in the vehicle, employment status, etc. A very general answer is, it depends. The main thing is getting consumers to think about their options. The product is meant to be customized, and this is done best with guidance from an insurance broker.

    May 25 | 13:02
    Reply


by Judy

Some good basic information, but as a broker I find clients have a lot of “interesting” questions:
a) If I have a Commercial Auto Policy, a separate Motor Bike Policy and a separate Personal Auto Policy, if myself or a member of my family is injured in any vehicle, those I insure or in another automobile or as a pedestrian, does the injured party get to chose the best coverage from any auto policy in force?
: is this dependant on “listed drivers” on each of these policies?
b) a minor child injured in an auto accident, maybe in a shared custody situation, again are they entitle to the best coverage under either parents auto policies.
c) The basic standard $65,000 Medical/Rehabilitation and Attendant Care Coverage, or any increased coverage taken.
: is the limit for these coverage, per accident or per person injured?

I also find that clients, although they know they have benefits at work, don’t really seem to know the limitations of that coverage, and most plans have limits. ie chiropractic for example in my plan pays only $300 max / year.
I try to explain to my clients, that just because you only drive in a small city, and not in a larger city, doesn’t mean you can’t get hurt, it happens quickly. Check your limits at work, check with your financial advisor, if you also have life insurance, disability insurance, critical illness insurance, and other coverage, to make an informed decision regarding the coverage you or a family member may need in the even of an auto accident injury.

August 11 | 11:40
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    by IBAO

    Thanks Judy. Great questions and advice. The nuances of coverage are the reason all consumers in Ontario should customize their auto coverage.

    a) In the case of multiple policies, priority of payment schedules take effect. If an individual is insured under a commercial fleet but has a personal policy, it’s the personal policy that would come into play. Companies determine where principle drivers are insured in order to apply benefits, and typically a commercial fleet policy carries only standard AB limits.
    b) A minor in a shared custody situation would likely be afforded coverage under the parent they predominately live with, and/or the parent who has the best AB coverage. When parents aren’t living together, it’s advisable for both individuals to buy up their options.
    c) The limit is per person, per accident. If there were multiple accidents involving the same or different people, limits are always the same.

    August 16 | 09:52
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Thanks for sharing great post. I think with new regulations insurance policy become more affordable to consumers. It is also more easy to add new coverage and policy options in specific areas of your life.

October 14 | 07:49
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This is a great list to have. I wonder though, whether one can claim insurance if the accident happened overseas? Unfortunately, my sister happened to have an accident while she was on cruise. Do insurance policies cover those as well?

November 24 | 04:28
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    by IBAO

    Unfortunately coverage doesn’t apply to accidents overseas. According to OAP 1 (1.2) coverage applies when accidents occur in Canada, the United States or on a vessel travelling between ports of each country.

    Appreciate the question!

    November 25 | 13:45
    Reply

Nice information,i really enjoy reading this post.

August 26 | 07:10
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