Ontario budget 2013: Victims? advocates worry about auto insurance reform

Medical professionals and litigation lawyers say an important constituency is being left out of the debate over Ontario auto insurance premiums: accident victims.


By: Kristen E. Courtney Special to the Star, Published on Tue Apr 30 2013


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Medical professionals and litigation lawyers say an important constituency is being left out of the debate over Ontario auto insurance premiums: accident victims.

The NDP has made a 15-per cent cut to premiums one of its key demands to support a Liberal budget that will be tabled May 2. Finance Minister has said the budget will include measures to gradually reduce premiums in some form.

The push for lower premiums is sure to be popular with drivers. But the medical professionals who treat accident victims and lawyers who advocate for them predict the result will be lower benefits for many of those injured in car accidents.

Ontario went through a similar debate about auto insurance premiums in 2010.

“The goal then was a 10 per cent reduction in premiums, but what happened was that the industry said that we had this really inflated system that was costing too much, and that we had to start reducing the amount of benefits that was available to people,” says Patrick Brown, a Toronto personal injury lawyer who specializes in motor vehicle accidents.

“Every step of the way, there has been a reduction in benefits.”

In most cases a maximum of $3,500 is now available to pay for an accident victim’s medical and rehabilitation costs — a dramatic reduction from the $100,000 that was once available to cover costs.

“We now have some of the most restricted benefits in the country,” says Brown. “No other province has this $3,500 limit.”

Rhona DesRoches, Chair of the FAIR Association of Victims for Accident Insurance Reforms, adds: “People aren’t getting the rehab they need . . . The $3,500 is gone within months.”

The Insurance Bureau of Canada, the industry’s main lobby group, has called on government for a commitment to tackle insurance fraud, and for a clearer definition of “catastrophic impairment” — a designation reserved for the 1 per cent of victims who are most seriously injured. The bureau says these steps are needed to reduce claims costs and, in turn, bring down premiums.

“Our priority is making the product, making auto insurance, affordable and stable for the drivers of the province. It is still too expensive, but unfortunately, it’s the costs in the system that drives that,” says James Geuzebroek, VP of communications for the bureau.

The cost to insurance companies of providing accident benefits needs to be reduced if premiums are to come down, he adds. “I’m not sure the accident victim has a good knowledge of what’s needed and what isn’t. They often just trust the process that they’re in, and trust the medical provider . . . But we want to make sure that it’s the right level of care that they’re getting — no less and no more.”

While just exactly how the premium reductions will be achieved has yet to be revealed, Ontario’s finance minister has already pledged to address fraud in the system, while a committee at Queen’s Park has been tasked with making additional recommendations as part of a broader study on auto insurance. Central in the debate has been the insurance industry’s request for clarity on the catastrophic impairment designation.

Dr. Charles Tator, renowned Toronto brain injury doctor, is concerned about the possibility that catastrophic impairment is redefined. The redefinition backed by insurance industry “does not give an accurate measure of disability,” he says. For example, “someone who has no use of their hands at all — someone who can’t make a meal, can’t brush their teeth, can’t wash themselves” could be ruled noncatastrophic, and would not have access to sufficient medical benefits to get rehabilitated.

“This is the big scare right now, says Brown, “they’re trying to make it harder for people to fall into the catastrophically-injured category . . . it would be absolutely awful for some people.”

The savings the industry is realizing as a result of the 2010 reforms are significant and these should be returned to the consumer through premium reductions, Brown adds, “but by no means should this be by reducing the number of accident victims who qualify as catastrophic.”

Kristen Courtney is an environmental lawyer and a Fellow in Global Journalism at the Munk School for Global Affairs.

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