Up until September 1, 2010, insured motorists had coverage for medical and rehabilitative expenses up to $100,000. This amount was, and still is, greatly increased if the injuries were determined to be catastrophic, but in the majority of cases the $100,000 limit applied. That limit or coverage has been cut in half to $50,000.
Not only has the coverage been cut, but certain med/rehab assessment costs that did not previously count against the $100,000, now count against the new $50,000 limit. Effectively, you now have less than half of your previous coverage.
There is also a new minor injury guideline. If your injuries fall within this guideline, your coverage for medical and rehabilitative expense is much, much lower again. There will, of course, be disputes as to whether an insurer who tells you that your injuries are minor has made a fair and proper determination.
Returning to those instances where the injuries are neither catastrophic nor minor, there is the option of buying back $50,000 of coverage so that you again have $100,000. While it may be unpleasant to pay more for the same coverage, the premium for this buyback is small. Personally, the writer of this article has bought back the lost medical and rehabilitative coverage.
The Housekeeping and Homemaking and the Caregiver benefits have been eliminated from basic coverage, unless the injuries are catastrophic. The coverage limit for Attendant Care has been cut in half. Again, most of what has been lost can be bought back for a small premium as part of optional coverage. However, in some instances your coverage will not be increased if your injuries are determined to be minor, even with the buyback.
The basic income replacement benefit is now calculated as 70% of one’s gross income, rather than 80% of net, up to a maximum of $400/wk. While 70% of gross will generally be more than 80% of net, the insurer will pay the same amount as before in most instances. This is because anyone making more than $30,000 per year is affected by the $400 per week cap for lost income.
The cost of optional coverage for a higher income replacement benefit is a little more than for some of the other items. Also, if you have private disability insurance or disability insurance through your employment, the $400 cap in your auto policy will be a lesser issue. However, a higher income replacement benefit is something you should discuss with your broker. Many of our clients regret not paying a little extra for better coverage.
There is helpful information on this subject on the website of the Financial Services Commission of Ontario. The link is as follows: