Insurance coverage called ‘a joke’?


Chatham Daily News

News Local


By Ellwood Shreve, QMI Agency

Friday, July 6, 2012 Mention the topic of auto insurance reform and you'll quickly get personal injury lawyer Jim Allin's blood boiling.

What the Chatham lawyer finds particularly galling about the reforms that went into place on Sept. 1, 2010, is the creation of a Minor Injury Guideline (MIG) that puts a cap of $3,500 in medical and rehabilitation benefits for those injured, at no fault of their own, in a motor vehicle crash.

“What I'm finding is unless my clients are obviously, extremely seriously injured . . . all my clients are being placed into this (minor injury) guideline by all these insurance companies,” Allin said.

He has clients who have gone through the $3,500 benefit in one month for physiotherapy and other treatments.

“Do you have any idea how fast that goes these days?” he said.

“Auto insurance in the province of Ontario, right now, is a train wreck,” he added. “It is so unfair to innocent accident victims . . . it's just plain wrong.”

Chatham lawyer, Jerry O'Brien, said insurance industry statistics show around 70% of people injured in a crash are being put in the $3,500 benefit cap category.

He said $3,500 doesn't go far when a lot of services are being de-listed from OHIP coverage, such as chiropractic services, physiotherapy and massage therapy.

He said, statistically speaking, 15-20% of neck or back injuries are permanent.

The $3,500 minor injury benefit “just simply doesn't go far enough to allow people to get better,” O'Brien said, adding the coverage being provided for what people are paying in premiums “is a joke.”

As a result of the reforms, the standard limits for medical rehabilitation has been reduced to $50,000 from $100,000 for non-catastrophic injuries, including broken bones. Other reductions in standard coverage include 70% of gross weekly income down from 80%, but the maximum of $400 per week remains the same. As well, benefits for attendant care were cut in half to $36,000, from $72,000.

However, there are options to pay more for extra coverage, one example being $100,000 for medical and rehabilitation services, once the standard limit.

Peter Karageorgos, manager of consumer and industry relations for Ontario with the Insurance Bureau of Canada, told The Chatham Daily News the minor injury guideline was set up for sprains, strains and whiplash.

When asked how much money the lower limits have saved the auto insurance industry, he said: “It takes a little bit of time for those changes to work through the system.

Karageorgos believes the reforms have helped put some stability into the insurance system.

He noted the Financial Services Commission, which regulates the auto industry, showed in the fourth quarter of 2011 and the first quarter of 2012, that the general trend is that rate requests from insurance companies are going down.

O'Brien figures the average person has had their coverage reduced by 50-60%, noting, “they certainly didn't see that drop in their premiums.”

Karageorgos freely states: “Premiums are still way too high in Ontario.”

He said auto insurance is like any product, “it's your cost that drives your premiums or your price.”

Insurers in Ontario have seen costs far outpace what the premiums are, resulting in insurers losing about $2.8 billion from 2008-10, Karageorgos said.

“So what you need to do is get some stability in the system where costs are inline with premiums and, hopefully, the balance shifts so insurers can continue to reduce premiums,” he said.

Karageorgos said it's a competitive market so no insurance company wants to raise premiums and risk losing market share.

Allin said to him the most shocking example of why the auto insurance system is wrong is the $30,000 deductible applied to every pain and suffering award less than $100,000.

He said he has been unable to explain to his clients why the law says $30,000 of what a jury has awarded them fair and square, goes to the insurance company of the at-fault driver.

Karageorgos said the deductible is in place to show the value of the claim and to safeguard against clogging the court system with claims that may not have merit.

Allin said the deductible, which has been in place for years, started at $10,000, rose to $15,000, before doubling to the current $30,000.

“The insurance companies have progressively increased the amount of money they get to keep each time one of their bad drivers causes a crash,” Allin said.

[email protected]

Twitter: DailyNewsES

Leave Reply

You must be logged in to post a comment.