Why Ontario?s $3,500 minor injury cap is too low

By: Ellen Roseman On Your Side, Published on Sat May 04 2013

You’re driving along when another car rams you from behind. You feel pain and stiffness. Later, you’re diagnosed with whiplash.

Under the law, you’re entitled to accident benefits from your auto insurer. But whiplash is considered a minor injury, with benefits capped at $3,500.

You have little to spend on rehabilitation treatments not covered by Ontario’s health care system. Too soon, your benefits are exhausted.

The $3,500 limit is lower than it sounds. Insurance companies can include the cost of assessments in that amount. Moreover, insurers can cut you off at the preapproved amount of $2,200. Additional coverage is optional.

Lucas Szajek was driving when his car was rear-ended in December 2011. He and his wife have lasting injuries.

“My wife has chronic neck pains and has lost much of the feeling in her fingers. This recently resulted in her burning her hand quite badly,” he says.

“I’m much better, though my rib is popping out every now and then. The insurance company refused to cover more than $2,200 for my treatments and cut off my wife at about $3,500.”

Szajek found an entire industry of doctors doing accident assessments for insurance companies.

“They charge $950 per assessment,” he says. “As long as they rule in favour of the insurance company, they get business. If they don’t, the insurance company moves on to the next doctor or clinic.”

Unfair assessments are a common complaint. Many injured people don’t feel they get objective results when an insurance company orders the tests.

Rhona DesRoches was in a 1994 car accident that left her and her husband injured. She became militant after seeing her husband fight for benefits for almost a decade.

She’s the chair of a one-year-old advocacy group, Fair Association of Victims for Accident Insurance Reform, which has 100 individual and corporate members.

“It’s the most common thing I hear,” she says. “Members tell me they’re disqualified from getting benefits after an independent medical assessment.”

She talks about the $3,500 limit, known as the MiG (minor injury guideline). If it’s only a guideline, why do 80 per cent of those injured in car accidents end up there? And why do they have to hire a lawyer to get more coverage?

The MiG was challenged successfully for the first time this year at a Financial Services Commission of Ontario arbitration. Belair Insurance, the defendant, says it plans to appeal.

Nicole Corriero, the lawyer who argued for the plaintiff (Lenworth Scarlett), says the changes made by the Ontario government in September 2010 aren’t well known or understood.

“Many clients I deal with have no idea how significantly reduced their benefits are. That’s because, despite the severe cuts made to available benefits, premiums have increased,” she told me.

“Most insurance companies have used this change to do across-the-board refusals on all benefits the second they see someone suffering a soft tissue injury — regardless of the complicating factors involved that may warrant treatment beyond the $3,500 cap.”

In its recent budget, the Ontario government promises to bring down the cost of car insurance. It wants to license clinics that treat injured people after some have been caught padding insurance claims.

DesRoches, who speaks for accident victims, wants to see more focus on the harmful practices of insurance companies.

“We’re against fraud of all sorts, such as inflating the cost of a claim. But what about deflating the cost of a claim? This happens when insurers say you’re not injured when you are,” she argues.

British Columbia’s publicly owned auto insurance system discloses how much assessors earn each year working for insurance companies. She wants Ontario’s private insurers to do the same.

“By making this information transparent, the public would be alerted to the potential for bias when medicolegal assessors become beholden to the private insurers for the lion’s share of their income,” DesRoches says.

Accident victims are finally speaking up and having their voices heard in the industry-dominated debates about insurance costs. It’s about time.

Ellen Roseman writes about personal finance and consumer issues. You can reach her at [email protected] or www.ellenroseman.com