In search of an advocate; Someone has to step up for car accident victims and insurance consumers

 By Alan Shanoff ,Toronto Sun, First posted: Saturday, March 17

This is Fraud Prevention Month. There are many scammers ready to pounce on the unwary and we need to be vigilant to avoid becoming victims of fraud.

The RCMP, the OPP, Canada Revenue Agency, the Competition Bureau and other government agencies implore us to protect ourselves, to avoid being taken in by fraudsters.

The Insurance Bureau of Canada is also reminding us of Fraud Prevention Month, telling us to be on the lookout for insurance fraud.

And that’s got me thinking.

Sure, there’s plenty of insurance fraud. Sure, we need to stamp out crime rings that engage in staged accidents.

This includes the fraudulent body shops, towing companies and medical and rehabilitation clinics that participate in such scams.

But why isn’t there a month where we advocate for car insurance consumers and car accident victims?

There’s little doubt both are under sustained attack by the insurance industry.

Ontario accident benefits were drastically reduced in 2010.

Many were eliminated while others were cut in half.

The majority of claims are now dealt with under a so-called minor injury guideline in which benefits, including the costs of assessments, are capped at $3,500.

Proposals have been made to limit the number of catastrophic impairment designations, thereby reducing the number of victims who qualify for the broadest range of benefits.

Treatment plans and requests for treatment for accident victims are being denied at increasing rates.

Insurance adjusters have and use the power to deny assessments and treatment, without obtaining a supporting medical opinion.

Adjusters deny, delay or remove benefit payments with little or no notice, without providing any reasons.

Victims aren’t given the benefit of the doubt and are often treated as adversaries.

Mediation requests face delays of about one year.

Arbitration requests face similar delays, meaning accident benefits claims in dispute and related medical treatments can be delayed for a minimum of two years before a decision is released.

That decision can then be appealed, creating more delay.

Insurers are resisting efforts to streamline dispute resolution by insisting on mediation prior to arbitration, even if it means an additional year of delay.

Insurers retain preferred, expert physicians to deny claims, many of whom earn the bulk of their income from insurer reviews.

Many of these “hired gun” reports from assessment mills are prepared by physicians who perform “paper reviews”, without examining the victim.

Clinic administrators are writing portions of insurer medical expert reports, with the doctors writing only a small portion, because the cap on fees for reports, a mere $2,000, doesn’t allow for adequate compensation for doctors.

Legitimate accident victims are easily labelled malingerers or opportunistic fraudsters by insurers.

Decisions, including arbitration decisions, denying benefits have been based on reports by so-called experts who lack expert qualifications or proper credentials.

Victims can be buried under requests for multiple assessments.

Claimants who sue the other driver face a $30,000 deductible for claims under $100,000 and must also satisfy a stringent threshold to recover any award.

I could go on but I’ll end with this concern: In spite of the decrease in benefits, premiums keep increasing.

For example, my car insurance premium is going up a whopping 16.4% next month.

Apparently my postal zone in North York has seen a large increase in claims that trumps my accident-free record of 44 years.

So who is going to speak up for accident victims and car insurance consumers?

Even the Consumers’ Association of Canada, which used to be active in covering the insurance beat for consumers, appears to have lost interest in the subject, having issued only one press release or study on the topic since 2004, with their last release four years ago.

So who is going to declare a month in favour of accident victims and insurance consumers? Who is going to step up?

Personal injury lawyers fed up with FSCO mediation delays

The delays associated with Ontario’s mandatory accident benefit dispute process are ridiculous.
The Financial Services Commission of Ontario has failed to provide a timely process for resolving disputes over accident benefits.

Personal Injury Law by Darcy Merkur

For those unfamiliar with the mandatory dispute process, all Ontario accident benefit disputes must first go to mediation through FSCO before the applicant has the right to issue a lawsuit or arbitrate.

Accident benefit disputes range from critical disagreements over whether someone has suffered a catastrophic impairment to seemingly minor questions over whether an accident victim requires physiotherapy.

But denials of entitlement, even for these minor disputes, can have a real and significant impact on an accident victim’s recovery and well-being.

Imagine explaining to a personal injury client that, although the treating doctors have recommended physiotherapy, the insurer disagrees (usually based on the results of an independent medical examination hotly disputed by the applicant), and that disputing the denial involves getting into a nearly one-year waiting line at FSCO simply to have the privilege of a phone call with a FSCO mediator to beg the insurer to reconsider.

Only thereafter can the client begin the lengthy arbitration or litigation process.
It is not a comfortable conversation, to say the least.

At the end of the conversation, sadly, these vulnerable accident victims often express a willingness to comprise their rights to benefits in order to avoid the drawn-out battle.

Given these unconscionable FSCO mediation delays, many plaintiff-side personal injury lawyers have decided to bypass its mediation process altogether by commencing lawsuits or arbitration once 60 days have passed since the date they filed their application for mediation. In doing so, they rely on FSCO’s dispute resolution practice code that references this timeline.

Recently, thanks to the valued efforts of personal injury lawyer Bruce Kelly, the Ontario Superior Court has validated this approach in Cornie v. Security National.

In his reasons, Justice James Sloan noted FSCO’s dispute-resolution services mediation unit is functioning without timelines and has been doing so for years. He acknowledged as well that vulnerable accident victims often need timely access to accident benefits.

Some FSCO arbitrators, like Jeffrey Rogers in Leone v. State Farm Mutual Automobile Insurance Co., have also recently accepted this deemed failed mediation approach.

But many FSCO arbitrators remain unwilling to follow this new jurisprudence pending resolutions of appeals from these decisions.

While FSCO is trying to deal with the delays that are undoubtedly due to its lack of resources, wouldn’t it be more appropriate for it to face its failures by simply welcoming parties who can’t wait forever in line to mediate to rely on a deemed failed mediation 60 days after their application?

Ontario personal injury counsel are rightfully fed up with the FSCO mediation delays and have made it clear that we will no longer let the FSCO lineups prevent timely access to justice.

Darcy Merkur is a partner at Thomson Rogers in Toronto who practises plaintiff-side personal injury litigation, including motor vehicle matters. He is a certified specialist in civil litigation and the creator of the personal injury damages calculator.

Written by Darcy Merkur,

Cost of Ontario car insurance stabilizing, but benefits have been chopped

Ellen Roseman Mon Feb 13 2012

When you look at auto insurance rates in Ontario, you find both good news and bad news.

The good news: The cost of insuring private passenger vehicles is going up less quickly than in the past.

The average increase among Ontario insurers that filed for approval in the last three months of 2011 was 1.84 per cent. That compares to an increase of 3.57 per cent in the year-earlier period.

Even better news: A few insurance companies are lowering their rates.

Intact Financial, Ontario’s largest auto insurer, is cutting rates 2.32 per cent. Trafalgar Insurance is cutting rates by 1.79 per cent.

I’m talking about average rates approved by the Financial Services Commission of Ontario (FSCO). You may pay more or less than the average, depending on where you live, your vehicle and your risk.

The bad news: The cost of car insurance is still going up.

Related: Buying car insurance: 10 things to know

The Ontario government hoped to see rates flatten or fall when it slashed accident benefits on Sept. 1, 2010.

Even worse news: Some insurers, including Lombard, Coachman, CUMIS, Primmum and TD General Insurance, were given increases of 6 to 9 per cent in the last quarter.

“The reforms were necessary to address abuses and fraud in the system,” says Kristen Rose, a FSCO spokesperson. “Premiums are expected to be lower than they would have been without reforms.”

So, what are Ontario’s new auto insurance rules? And how are you affected if you’re injured in a car accident?

There’s a $1 million limit on medical and rehabilitation claims for those with catastrophic injuries — such as the three people who survived the crash near Stratford in which 11 people were killed.

Catastrophic injuries make up only one per cent of the 65,000 Ontarians injured in car accidents every year.

Almost 20 per cent of accident victims have severe, but noncatastrophic injuries. Their benefits are capped at $50,000, down from $100,000 before the reforms came in.

I’m talking about services that the public health system doesn’t pay for, such as physiotherapy, chiropractic, massage and psychological counselling.

Only a few policyholders have chosen to pay higher premiums to get more than $50,000 in medical benefits, according to a FSCO survey.

The remaining 80 per cent of accident victims have soft tissue damage — such as whiplash, strains and sprains — and have their medical benefits capped at $3,500.

So-called minor injuries used to be covered under the $100,000 limit. Now you can’t boost your benefits beyond $3,500, even if you want to pay more.

Why was it necessary to cut back coverage so severely?

Accident benefits claims costs per vehicle more than doubled from 2006 to 2010, the Ontario government said. And most of these increases came from the Greater Toronto Area.

“Of the $2.4 billion increase in accident benefits costs in Ontario through this period, $2 billion occurred in the GTA, amounting to $800 per vehicle insured in the GTA in 2010,” said an anti-fraud task force last December.

The government suspected that costs were inflated by fraud, especially when private health expenditures grew at a much slower rate in the same period (up 22 per cent).

The task force is still hard at work. But its interim report says the figure of $1.3 billion used by Ontario’s insurance industry “cannot be considered a verifiable measure of the scope of fraud at this time.”

Will the reforms curb accident benefit costs?

That depends on how many minor injury cases stay under the $3,500 cap. People with pre-existing health conditions that don’t allow them to recover from an accident can be bumped up to the $50,000 level.

“We think pre-existing conditions ought to be documented if you say that you can’t be treated appropriately under the cap,” says Ralph Palumbo, Ontario vice-president of the Insurance Bureau of Canada.

The group also wants to see health clinics licensed or regulated and a dedicated fraud investigation unit set up.

“The average injury claim in Ontario is $56,000. It’s about five times the average in any other province and it’s a staggering, staggering number,” Palumbo says.

While premiums aren’t coming down yet, it’s clear the reforms are having a damaging impact on accident victims.

Last week, the Ontario Trial Lawyers Association (OTLA) released a survey showing that 75 per cent of members had clients needing treatment who had exhausted the $3,500 minor injury limit.

The minor injury guidelines have had the greatest effect on accident victims of all the September 2010 changes, the trial lawyers said.

Insurers can insist the $3,500 cap applies, even when proof of a pre-existing condition is provided. That decision may not be reviewed for a year or more because of FSCO’s backlog of thousands of mediation cases.

“Injured accident victims have no immediate recourse and are often forced to go without appropriate care,” said Laura Hillyer, an OTLA director.

Ontarians now have “the worst automobile insurance protection in Canada” and are entitled to greater coverage, she added.

The Alliance of Community Medical and Rehabilitation Providers polled its members and found 42 per cent of treatment requests were being rejected — up from only 11 per cent before the reforms came in.

“We can’t lose sight of why insurance was created in the first place — to protect victims from vehicle damage and bodily harm,” says Alliance president Nick Gurevich.

The World Health Organization recently published a report about disability, emphasizing “the overarching importance of early access to care,” he says.

But according to Alliance members, more than half of their patients who have been slotted into the minor injury category will run out of benefits before they recover.

Consumer tips on buying auto insurance:

  • Drive carefully. Traffic violations, such as speeding or not wearing a seatbelt, can cost you more than a fine. After two offences in a three-year period, your insurance rates can go up 10 to 15 per cent. (Parking tickets don’t count.);
  • Choose an insurer that offers first claim forgiveness for accidents in which you’re at fault;
  • Get a discount if you bundle your car and home insurance policies with the same provider. More than half of consumers don’t take advantage of multiline discounts, ranging from 5 to 10 per cent;
  • Ask about discounts for belonging to a roadside assistance program. That can save you up to 15 per cent. Driving with winter tires can save up to 5 per cent;
  • Pay your premiums in full once a year. Many insurers charge a fee if you opt for a monthly payment plan;
  • Shop around for low premiums, using an online comparison tool such as Insurance Hotline or Kanetix.

Torstar News

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