Ontario Auto Reform and how it will affect you

Ontario Auto ReformOntario Auto Reform and how it will affect you and how it will affect you

Prepared for:

University of Windsor Faculty Association

Presented by:April Pittendreigh, BA, CAIB, CIP

April 21, 2023Stevenson & Hunt Insurance

Brokers Limited

AgendaAgenda

New Regulations Accident Benefits coverage – limits and

options Priority of Payment FAQ’s

New RegulationsNew Regulations

Effective September 1st, 2010 Coverage reduced to new Standard on

renewal New SABS (Standard Accident

Benefits) limits New Tort Deductible options SABS procedures September 1st

So…….So…….

What changes are taking place September 1, 2010??

(note, with some exceptions, changes will not affect you until your first policy renewal following September 1, 2010).

Income Replacement BenefitIncome Replacement Benefit

Prior Sept 1st SABS Based on 80% net

weekly income up to a maximum of $400

September 1st SABS▪ Based on 70% gross

weekly income up to a maximum of $400

▪ Options increase weekly maximum limit to $600, $800, or $1000. Settlement still based on 70% of gross weekly incomeSABS: Standard Accident Benefits

Non Earner BenefitNon Earner Benefit

Prior Sept 1st SABS $185 per week

first 104 weeks▪ $320 per week

after 104 weeks (complete inability test)

September 1st SABS

▪ $185 per week first 104 weeks

▪ $320 per week after 104 weeks (complete inability test)

No Change

SABS: Standard Accident Benefits

Caregiver BenefitCaregiver Benefit

Prior Sept 1st SABS $250 w/ + $50

each additional dependent

▪ Available for any impairment

September 1st SABS

▪ $250 w/ + $50 each additional dependant

▪ Only available if claimant suffers a Catastrophic Impairment

▪ New option – caregiver, housekeeping, and home maintenance for non-cat impairments – No standard cover

Catastrophic ImpairmentCatastrophic Impairment

Paraplegic or quadriplegia The total and permanent loss (loss of use) of an arm

or leg Total loss of vision in both eyes A score of 9 or less on a Glasgow Coma Scale within

a reasonable period of time A score of 2 or 3 on a Glasgow Outcome Scale more

than six months after the accident Impairment of 55% or more of the whole person

Medical and Rehab BenefitMedical and Rehab Benefit

Current SABS September 1st SABS▪ $100,000 for non – ▪ $50,000 for non-catastrophic

catastrophic impairments impairments

▪ $1,000,000 for catastrophic ▪ $1,000,000 for catastrophic

▪ Limits exclude assessment ▪ Limits include assessment costs - $2,000 max/assessment

→ Limits reduced by 50%

→ New $3,500 maximum Minor Injury limit for Medical Expenses

→ New option – Medical/Rehab benefit “buy back” to $100,000SABS: Standard Accident Benefits

Attendant Care BenefitAttendant Care Benefit

Current SABS September 1st SABS▪ $72,000 for non-catastrophic ▪ $36,000 for non-

catastrophic impairments – $3,000/mth impairments -$3,000/mth

▪ $1,000,000 for catastrophic ▪ $1,000,000 for catastrophic

- $6,000/month - $6,000/month

→ Limits reduced by 50%

→ New option – Attendant Care benefit “buy back” to $72,000

→ Minor Injury claimants do not qualifySABS: Standard Accident Benefits

Current SABS vs. September 1stCurrent SABS vs. September 1st

Medical, Rehabilitation, and Attendant Care▪ Option to buy up three coverage’s as a package at $1,000,000

Important considerations:▪ Potential 1 year gap for attendant care – 3K/month * 12 = 36K

▪ Coverage provided under this optional coverage for listed drivers only

Current SABS vs. September 1stCurrent SABS vs. September 1st

Current SABS

Death and Funeral Benefit

▪ $25,000 to spouse,

$10,000 each dependant

▪ $6,000 funeral expenses

September 1st SABS

Death and Funeral Benefit

▪ $25,000 to spouse,

$10,000 each dependant

▪ $6,000 funeral expenses

▪ No Change


Other OptionsOther Options

▪ **Indexation Benefit (no change)

▪ Death and Funeral (no change)

▪ Dependant Care (no change)

- $75 for first, $25 each additional, max $150/week (this is a buy-up of the Caregiver Benefits)

Post Sept. 1Post Sept. 1stst Renewals Renewals

Policies issued on or after Sept. 1st, now lower SABS applyPolicies issued before Sept 1st, old limits honoured until renewal following Sept. 1st

Execution of claims process will still change for claims occurring on or after Sept. 1st

Any accident occurring prior to Sept. 1st, old SABS procedures apply.



Broker or Insurer cannot issue policy with new options exercised to bring policy to old standard

▪ Ministry of Finance clarified this as “negative option billing”

▪ All options sold must be presented to consumer to make an informed decision


Any options already exercised by the consumer will continue through the renewal

i.e. a consumer has purchased increased income replacement benefit with a limit of $800

i.e. a consumer has purchased the increased medical/rehabilitation and/or attendant care. Their renewal following September 1st will still contain this option


If no options have been purchased under the AB section, the renewal will contain only the new Standard Policy AB limits

AB: Accident Benefits

Sept. 1Sept. 1stst Renewals Renewals

Policy holders able to buy down their existing policy limits to new standard on September 1st if their policy renews prior

▪ Policy holders may want to discuss possible cost savings by reducing their coverage before their renewal

SABS Processes & ProceduresSABS Processes & Procedures

Effective September 1Effective September 1stst for all….. for all…..


New SABS – Other NotesNew SABS – Other Notes

WAD 1 (Whiplash Association Disorders) and WAD 2 definitions removed

Will be included in new Minor Injury Guideline


Minor Injury LimitsMinor Injury Limits

Claimants meeting the Minor Injury definition will only be eligible for $3,500

▪ Claimant’s doctor can present “compelling evidence” if higher limits are needed

Minor Injury LimitsMinor Injury Limits

Minor Injury Definition:

sprain, strain, whiplash associated disorder, contusion , abrasion,

laceration or subluxation (partial or complete dislocation of a joint) and any clinically associated sequaelae (other pre-existing conditions).

Tort DeductibleTort Deductible

Introduces an option for consumers to purchase an endorsement that provides first-party coverage to reduce the tort deductible for pain and suffering awards to $20,000 from $30,000 and to $10,000 from $15,000 for Family Law Act (FLA) claims.

Direct Compensation DeductibleDirect Compensation Deductible

Direct Compensation – new coverage introduced under “no fault” – similar to collision coverage, but for accidents that are not the insured’s fault $500 is new standard (was $300, although most clients bought deductible down to $0) Option is still available to buy DCPD (Direct Compensation Property Damage) deductible down to $0 Renewing policies will maintain their existing deductible

DCPD: Direct Compensation Property Damage

Other ChangesOther Changes

<25% AF rating no longer ratable

$2,500 maximum for accountant fees

- when calculating the eligibility for an Income Replacement Benefit (IRB)

claim.

AF: At Fault Accident

Other ChangesOther Changes

40/10 – Amends 777/9340/10 – Amends 777/93Statutory Conditions - AutoStatutory Conditions - Auto This regulation amends the “appraisal” condition

- an insurer can no longer deny an insured who wants to pursue the appraisal option if dissatisfied with the valuation determination.

Documents to EducateDocuments to Educate

3 mailers to be sent to customers to educate them on the changes 1. Early Awareness Mailer 2. Point of Sale Document 3. New Regulation Mailer

The first two of these are legally required to be sent by insurers. The third can be sent by either insurer or broker.

Priority of PaymentPriority of Payment

Various sources of benefits may be available• Disability Policy• Short-term/Long-term Disability• Worker’s Compensation• Automobile Accident Benefits

Typically Ontario Auto Accident Benefits would be the last to pay, however if WSIB, the insured must choose between AB and WSIB

AB: Accident Benefits; WSIB: Workplace Safety and Insurance Board


If the insured is seriously injured and meets the definition of “threshold”: “Death, or Suffered a permanent serious disfigurement, or suffered a permanent serious impairment of an important physical, mental or psychological function.”If third party is responsible for the accident, and insured meets threshold, insured can sue for Pain and Suffering. No Threshold is required to sue for Economic LossAmounts paid out under Accident Benefits will reduce the amount paid out under lawsuit.


If you have a disability policy in place, Accident Benefits may “top up” Income but will not pay over 70% of gross income (total).

Q&AQ&A

Questions?

Ontario Auto Reform and how it will affect you

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