Mileage No Longer a ‘Reasonable’ Expense?

Arbitrarily changing a practice of more than 20 years’ standing, insurers are no longer reimbursing service providers for mileage when they must travel to treat seriously injured clients. 

This change will have serious and significant consequences for providing treatment to persons with serious and catastrophic injuries who must receive services in their homes, community settings or workplaces in order to get better. This is the single most dramatically negative change impacting claimants that we’ve experienced since the 2010 cuts

The change makes clear to how little understanding FSCO and the Ministry of Finance have about the needs of seriously injured persons and the importance of community-based treatment. Insurers have claimed that mileage is merely ‘a cost of doing business’ – or overhead.

Really? In what world?

Mileage is an incurred cost directly related to providing treatment. Overhead expenses are not attributable to a specific client. Just as insurance companies pay mileage or provide gas cards or rented vehicles to staff so that they needn’t absorb the cost of doing their jobs, the same is true for rehab providers. When mileage is incurred it is because the client’s condition requires that our services be delivered in the home, community setting or workplace, in order for the rehabilitation goals to be achieved. 

This change hurts the injured as well as the service providers. Many providers may not be able to provide service under these conditions – particularly in rural and remote regions – and this will have a profound impact – creating significant ‘down river’ costs of injured persons unable to return to work or school or look after their children, more serious injuries becoming catastrophic due to lack of treatment, increased numbers of disputes and more costly tort settlements. 

We also question the fairness and optics of a stance that leads to lack of treatment and services for claimants while the system continues to pay significantly, without quibble or question, for mileage and incurred travel costs for investigators and insurer-ordered IE exams to support denial of treatment.

Writing a book can lead to repercussions: Roseman

Jokelee Vanderkop fought two insurance companies to get benefits after a car accident. Now she’s fighting to keep her benefits after writing a book.

By: Ellen Roseman On Your Side, Published on Tue Feb 10 2015

Jokelee Vanderkop wrote a book about how to fight your insurance company to get benefits. Now she’s preparing for another fight about her benefits.

In 2008, she won a lawsuit against the Personal Insurance Co. after a car accident left her unable to continue working as a high school teacher. When the company appealed in 2009, she won again.

She was 44 when injured in 1997. Now 62, she lives on income replacement benefits paid by her insurer.

Hoping to share her experiences of a court battle that lasted more than a decade, she put out a self-published book, So You Think You’re Covered? The Insurance Industry Ripoff, in 2013.

Most of the 200 copies were given away to friends or dumped, she says. When told the writing was weak, she published a revised edition last fall and sold 84 copies (at $25 apiece).

As part of her publicity campaign, she was a guest on an hour-long CBC radio phone-in program on Jan. 21, Ontario Today. It didn’t take long for her insurance company to follow up.

“I received a letter, dated Jan. 31, saying I now had earnings that could be deducted from my benefits entitlement,” she says. “They said they could not consider any further payments until I submitted my earnings statements and my tax returns for the last five years.

“The insurance company has a right to request information, but normally they tell you it’s required in order to continue benefits. In my case, they cut me off first. This is pure intimidation.”

Desjardins General Insurance Co., which owns The Personal, said there was a misunderstanding about her benefits being cut off.

“When we learned that Ms. Vanderkop published and is promoting a book, we sent her a standard form asking for copies of her tax returns,” explained spokesperson Joe Daly.

“Under the legislation, a portion of any income she earns from the book, or any other source, could be deducted from the weekly income replacement benefits we send her. We naturally assume that she wrote the book to earn income.

“Please note that we have not cut off her benefits and have no intention of doing so. If her tax returns indicate that she has little or no income from the book or other sources, then her weekly entitlement payments will not be affected.

“We didn’t send the note to intimidate Ms. Vanderkop. We were just curious if she was now working as a writer, which is a difficult and demanding job, and earning income.

“In retrospect, the claims adviser who decided to send the form obviously didn’t understand the realities of publishing in Canada. It’s tough to make any money writing a book.”

Rhona Desroches is chair of a non-profit advocacy group called FAIR, the Association of Victims for Accident Insurance Reform. She was a guest on the CBC radio show with Vanderkop.

“We heard from six to eight callers, who all had benefit claims that were about seven years old,” she says. “The people were injured and not in the best shape. I found it very moving.”

Desroches has heard from many frustrated insurance customers. She finds Vanderkop’s story a bit more complicated than most because there were two insurers battling it out at her expense.

She was insured by Personal under a motor vehicle policy and by Manulife under her employer’s group policy. When Manulife denied her application for long-term disability benefits in 1997, she ended up settling for a $57,500 lump sum during a private mediation in 2002.

After the mediation, Personal refused to pay income replacement benefits to Vanderkop, even though she met the test for entitlement, because of the settlement she made with Manulife. Personal argued that it could deduct any long-term disability benefits that might have been payable had Vanderkop been successful in her litigation.

The Ontario Court of Appeal said income replacement benefits could be reduced by long-term disability benefits resulting from an accident. But Personal could not set off hypothetical benefits applied for, but refused.

The long legal fight has led to other health problems for Vanderkop. But she’s keen to give tips to accident victims, such as not keeping a journal during a hearing (since it may be confiscated and used as evidence).

Desroches draws a lesson from the author’s tussle with her insurer about potential book earnings.

“I think it is outrageous that a person’s benefits are always at risk,” she says. “Settling a case with an insurer is no guarantee that the negative experience of making a claim with auto insurance benefits is really over.”

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

Insurers “blaming everyone else,” says broker

by Donald Horne 30 Jan 2015

 One outspoken broker added his voice to another on the attitude insurance companies take when it comes to rising claims costs.

“Insurers are blaming everyone else and not taking responsibility,” Mike O’Grady, broker/owner of O’Grady & Associates Insurance Services in Tillsonburg, Ont., told Insurance Business. “Griswald nailed it!”

O’Grady was referring to Griswald G., who commented on the article ’15 per cent target for Ontario auto does not compute’ that insurers need to “clean up their own delay/deny system and stop relying on slashing benefits” to balance the books.

“Some insurers are spending four times what the claim is worth on legal defense costs to deny legitimate claims,” wrote Griswald G. in the Comments section of Insurance Business, “and now insurers are upset when they have to pay the legal costs of the claimant who waited years and spent a ton of money holding the insurer accountable.”

The comments were levelled at the Insurance Bureau of Canada’s Barb Taylor, who had some tough talk for those elements that were driving up the costs in Ontario’s auto insurance sector.

“In Ontario average AB (accident benefit) costs were over $31,000. Compare this with Alberta and Atlantic Canada, where average AB Claims were around $8,600 and $3,700, respectively,” said Taylor, before an audience of brokers and insurance industry execs at the Crystal Ball in Toronto, Ont. “Clearly, there is something wrong with the Ontario system.”

The rising costs in AB and BI (bodily injury) show that those in the ‘car accident business’ – such as personal injury lawyers and med-rehab providers – are doing what they have done many times before: working around the latest reforms to find new ways to maximize pay-outs, said Taylor.

But for Griswald G., the true cost of rising claims can be laid almost squarely at the feet of insurers.

“Denying the claims of injured people costs more than adjusting claims by way of over-assessing the injury,” he wrote, “until the insurer finds the right assessor that will deny the injury even exists.”