Auto insurance in Ontario: The Liberal Government?s Failed Reforms

TORONTO (September 29, 2011) – The McGuinty government passed regulations a year ago that allowed insurers to slash standard auto insurance benefits, as the insurance industry insisted this was necessary to stabilize rates. The plan has backfired.

 Higher Premiums and Lower Benefits

“Motorists are now paying higher premiums for less insurance,” says Nick Gurevich, President of the Alliance of Community Medical and Rehabilitation Providers.

According to Kanetix, an online insurance quote comparison service, auto insurance rates in Ontario increased 6.4% in the second quarter of 2011 compared to the same period a year ago, while Alberta and Quebec saw modest rate hikes of only 1.4% and 0.2% respectively. Rate hikes in Ontario are now running at more than double the rate of inflation.

Under the changes to standard automobile insurance coverage that became effective September, 2010, medical and rehabilitation benefits for minor injuries are now limited to $3,500, and benefits for serious injuries have been reduced from $100,000 to $50,000.

Treatment Being Denied

According to an Alliance survey of rehabilitation providers, an increasing number of people injured in motor vehicle accidents are now being denied healthcare services.

More than two-thirds of the survey respondents said insurers are now denying 30% or more of assessment and treatment plan requests (vs. a denial rate of 10% or less a year ago).

Under the Liberal government’s reforms, insurance companies are no longer required to obtain a second medical opinion before they can deny a request for assessment or treatment. That means an insurance adjuster with no medical training decides whether or not you need the rehabilitation therapy or equipment that a health care professional recommends for you.

Victims Running Out of Benefits

The same survey identified asignificant increase in the number of accident victims who are now running out of benefits before they are fully recovered.A majority of providers said at least half of their clients will now run out of benefits (vs. 10% or fewer of their clients a year ago).

Few Buying Additional Insurance

The government and the insurance industry maintain that the reforms give consumers more choice – that they have the option of buying additional insurance coverage if they wish.

But few people do. Based on a survey of insurers conducted by the Financial Services Commission of Ontario between September 1, 2010 (when the government changes came into effect) and December 31, 2010, only slightly more than 1 per cent of policyholders have bumped up their medical and rehabilitation coverage.

That means for the vast majority of consumers, they have far less protection than they had a year ago.

The Bottom Line

Dr. Donna Ouchterlony, medical director of the Brain Injury Clinic at St. Michael’s Hospital, puts it this way: “We are seeing more and more patients with serious injuries whose insurers are outright denying treatment, and when funding is approved, it is no longer nearly enough.”

Gurevich says “the system in Ontario seems designed to protect insurers, not those who have been hurt in accidents.” The McGuinty government’s reforms will allow insurance companies to trim hundreds of millions of dollars in payouts. Essentially, these costs have been transferred to taxpayers.  

The Alliance

The Alliance represents approximately 80 companies and about 3,500 health care providers including physiotherapists, occupational therapists, speech language pathologists, chiropractors, psychologists, rehabilitation therapists, social workers, personal support workers and case managers. It is these individuals who are the primary providers of healthcare and rehabilitative services to Ontarians injured in automobile accidents.

– 30 –

For further information, visit www.ontariorehaballiance.com

To arrange an interview, contact:

Niki Kerimova
416-777-0368