Auto insurance reforms come into effect.
Every now and again, the provincial government makes changes to the auto insurance system. Back in January, for example, all Ontario car insurance companies had to offer a winter tire discount to drivers who change their tires seasonally. There are more changes too, as of June 1, 2016. Most of the changes have to do with the Accident Benefits portion of your auto insurance policy, but there are other changes as well.
At Kanetix.ca, we've pulled together some of the changes so that you have a better understanding of what's going on with your auto insurance.
Minor collisions may not dent your insurance rates
As of June 1, 2016, minor collisions that you cause may not factor into your car insurance rate if:
- The collision happens on or after June 1st, 2016
- There are no injuries
- The damage is less than $2,000 per vehicle
- No one involved in the collision submits an insurance claim for payment
- As the at-fault driver, you pay for all of the damages out-of-pocket
This "accident forgiveness" is limited to one minor accident every three years.
Pay your premiums monthly? Your payments may decrease
Many companies charge a little extra to cover the cost of administering monthly payments. The maximum interest rate that can be charged has been lowered from three per cent to 1.3 per cent for a one-year policy, with similar reductions for shorter term policies.
Have comprehensive coverage? Your deductible may change
Comprehensive coverage is an optional add on to your policy. It protects you from the costs to repair damage to your vehicle from things like fire, theft, or vandalism. The standard deductible for comprehensive coverage has been increased from $300 to $500. You may be able to keep your deductible set at $300, but you'll need to confirm with your insurance provider.
Hurt in a collision? Some of your Accident Benefits have changed
Accident Benefits are benefits you receive if you are injured in a collision, regardless of who was at fault. These benefits are made up of many components and, depending on the severity of the injury, can cover expenses from things like physiotherapy to hiring a housekeeper until you're better.
- If you buy a new policy, or renew, on or after June 1st the changes will be reflected on your policy. If you renewed or purhcased a new policy prior to June 1, the changes will affect you the next time you renew or switch insurers.
Some benefits that were once considered "standard" have changed, specifically the total coverage amount for Medical and Rehabilitation costs and Attendant Care.
- The Medical and Rehabilitation benefit covers the cost of expenses like physiotherapy and prescriptions that are not covered by OHIP or your personal healthcare plan.
- The Attendant Care benefit pays for someone you hire to look after you.
New limits
| Accident Benefit | Policies renewed or purchased before June 1 | Policies renewed or purchased on or after June 1 | Your options |
|---|---|---|---|
| Medical and Rehabilitation for non-catastrophic injuries | $50,000 | These benefits have been combined and reduced to $65,000 total. | Increase the benefit to $130,000 total |
| Attendant Care for non-catastrophic injuries | $36,000 | ||
| Medical and Rehabilitation for injuries | $1,000,000 | These benefits have been combined and reduced to $1,000,000 total | Increase the benefit to a total of $2,000,000 |
| Attendant Care for catastrophic injuries | $1,000,000 |
(Financial Services Commission of Ontario)
In addition, a few options have changed for some of the other Accident Benefits.
New options
| Accident Benefit | Policies renewed or purchased before June 1 | Policies renewed or purchased on or after June 1 | Your options |
|---|---|---|---|
| Caregiver benefit If you cannot continue as the primary caregiver and you are eligible, this benefit reimburses you for your expenses. | Up to $250/week for first dependant, $50/week for additional dependants (catastrophic injuries only) | No change | You can choose to have this benefit extend to all injuries. |
| Housekeeping and home maintenance expenses If you are eligible, this benefit pays for expenses such as housekeeping or home maintenance. | Up to $100/week (catastrophic injuries only) | No change | You can choose to have this benefit extend to all injuries. |
(Insurance Bureau of Canada)
What about the other Accident Benefits?
There are many components to your Accident Benefits coverage which are still available with the same options, including the following as described in the Insurance Bureau of Canada pamphlet, "Your Auto Insurance Policy is Changing".
| Accident Benefit | Policies renewed or purchased before June 1 | Policies renewed or purchased on or after June 1 | Your options |
|---|---|---|---|
| Income replacement benefit If you cannot work because of the injuries caused by a car accident and you are eligible. | 70% of gross income up to $400/week | No change | Increase benefit to $600, $800 or $1,000/week |
| Dependant care benefit This benefit provides additional expenses to care for your dependants if you're injured in a car accident and working. | Not provided (you need to opt into this coverage.) | No change | Add up to $75/week for first dependant, $25/week for each additional dependant (max. $150/week) |
| Death and funeral benefits These are lump sum payouts for survivors of a person killed in a car accident to help pay for a funeral. | $25,000 to spouse, $10,000 to each dependantUp to $6,000 for funeral | No change | $50,000 to spouse; $20,000 to each dependantUp to $8,000 for funeral |
When does this all take place?
All of the changes take effect on June 1, 2016, but your policy won't change until it's time to renew or you switch insurers. When it's time to renew, you'll be given more information from your auto insurance provider. In the meantime, you can learn more about the changes at the Financial Services Commission of Ontario (FSCO) and the Insurance Bureau of Canada.
During times like these, when there are a lot of changes happening, chances are your auto insurance rates will change too. So in addition to understanding how your coverage has changed, you'll also want to shop around to make sure you're not overpaying for it. On this last point, Kanetix.ca can help because no one else covers as much of the market as we do. We shop the market to help you get the lowest rate. And, once you find a rate, we'll secure your rate by connecting you to the company. It's easy, secure and free.
