Ontario Auto Reform
and how it will affect you
Prepared for:
University of Windsor
Faculty Association
Presented by:
April Pittendreigh, BA, CAIB, CIP
April 13, 2015
Stevenson & Hunt Insurance
Brokers Limited
Agenda
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New Regulations
Accident Benefits coverage – limits and
options
Priority of Payment
FAQ’s
New Regulations
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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…….
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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 Benefit
Prior Sept 1st SABS
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Based on 80% net
weekly income up to
a maximum of $400
SABS: Standard Accident Benefits
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
income
Non 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 Benefit
Prior Sept 1st SABS
September 1st SABS
 $250 w/ + $50
▪ $250 w/ + $50 each
each additional
additional dependant
dependent
▪ Only available if claimant suffers
a Catastrophic Impairment
▪ Available for any
impairment
▪ New option – caregiver,
housekeeping, and home
maintenance for non-cat
impairments – No
standard cover
Catastrophic Impairment
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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 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 $100,000
SABS: Standard Accident Benefits
Attendant Care Benefit
Current SABS
▪ $72,000 for non-catastrophic
impairments – $3,000/mth
▪ $1,000,000 for catastrophic
- $6,000/month
September 1st SABS
▪ $36,000 for non-catastrophic
impairments -$3,000/mth
▪ $1,000,000 for catastrophic
- $6,000/month
→ Limits reduced by 50%
→ New option – Attendant Care benefit “buy back” to $72,000
→ Minor Injury claimants do not qualify
SABS: Standard Accident Benefits
Current 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 1st
Current SABS
September 1st SABS
Death and Funeral
Benefit
▪ $25,000 to spouse,
$10,000 each dependant
▪ $6,000 funeral
expenses
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SABS: Standard Accident Benefits
Death and Funeral
Benefit
▪ $25,000 to spouse,
$10,000 each dependant
▪ $6,000 funeral expenses
▪ No Change
Other Options
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**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. 1st Renewals
issued on or after Sept. 1st, now
lower SABS apply
Policies 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.
Policies
SABS: Standard Accident Benefits
Post Sept. 1st Renewals
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
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Post Sept. 1st Renewals
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
Post Sept. 1st Renewals
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. 1st Renewals
Policy holders able to buy down their
existing policy limits to new standard on
September 1st if their policy renews prior
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▪ Policy holders may want to discuss
possible cost savings by reducing their
coverage before their renewal
SABS Processes & Procedures
Effective September 1st for all…..
SABS: Standard Accident Benefits
New SABS – Other Notes
WAD
1 (Whiplash Association Disorders)
and WAD 2 definitions removed
Will
be included in new Minor Injury
Guideline
SABS: Standard Accident Benefits
Minor Injury Limits
Claimants meeting the Minor Injury
definition will only be eligible for $3,500
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▪ Claimant’s doctor can present “compelling
evidence” if higher limits are needed
Minor 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 Deductible
Introduces an option for consumers to
purchase an endorsement that provides firstparty 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.
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Direct 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
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DCPD: Direct Compensation Property Damage
Other Changes
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<25% AF rating no longer ratable
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$2,500 maximum for accountant fees
- when calculating the eligibility for an
Income Replacement Benefit (IRB) claim.
AF: At Fault Accident
Other Changes
40/10 – Amends 777/93
Statutory 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.
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Documents 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
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first two of these are legally required to be sent
by insurers. The third can be sent by either insurer or
broker.
Priority of Payment
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Various sources of benefits may be available
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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
Priority of Payment
If the insured is seriously injured and meets the
definition of “threshold”:
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“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 Loss
Amounts paid out under Accident Benefits will reduce
the amount paid out under lawsuit.
Priority of Payment
If you have a disability policy in place,
Accident Benefits may “top up” Income but will
not pay over 70% of gross income (total).
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Q&A
Questions?