After a near-fatal accident, Adam Bari discovered his insurance coverage had shrunk, just 12 hours previously, from $2 million to $86,000
I use this space right here to nag readers, on occasion. I also use my perch in front of a TV camera sometimes. Much of it is not riveting stuff, to be honest, but my, how important it can turn out to be.
You were told earlier this year of big new changes to Ontario’s auto insurance policies coming into effect in June. It was all over the media and your insurance company would have contacted you. We are inundated with information proclaiming to be the “most important” and “don’t miss this,” and I really have no idea how to cut through the clatter and clutter, only that we must find a way.
Insurance is administered by companies, but signed off on by the province. Changes can happen across the country, and there is no way to stress how critical it is to be aware of those changes. Adam Bari, a 34-year-old father of twins, found out in truly dreadful fashion what a difference a day can make. Or even just 12 hours.
Bari was t-boned on his motorcycle on June 1st, 2016, just outside of Hamilton, Ontario. As the CBC reported at the time, he was deemed not at fault, though his injuries included “brain trauma, multiple broken bones in his right arm, leg and hand, as well as internal organ damage.” Mistakenly pronounced dead at the scene, he awoke from a coma a month later; he also awoke to the news that he will face a long rehab, mounting medical costs and his insurance coverage to compensate had shrunk, just 12 hours previously, from $2 million to $86,000.
This is a brutal, brutal example of what can happen if you ignore the fine print or miss the warnings. The changes are in the metric of how injuries are classified, and thereby covered. As Deb Arnold, a broker with Sound Insurance Services points out, the changes were to rectify and clarify a system that was becoming burdened by lawsuits:
“The definition of ‘catastrophic injury’ prior to June 1 was extremely broad and left too much to interpretation, which led to far too many lawsuits for individuals not catastrophically impaired by injury. The new definition is tighter and more comprehensive. The purpose of the change was to clarify what would be eligible for a tort liability suit and what would not. However, there will forever be grey areas within the law itself and within the courts. The new definition only applies to accidents occurring on or after June 1, so the new definition has not yet been tested in court.”
All insurance policies have standard coverages and limits and deductibles. Consumers can change or augment them like an à la carte menu. Back in June, Ontario changed the wordings and limits in some of those coverages, and drivers should no longer just assume what’s now on offer is good enough or indeed, in some situations, even close to adequate.
The most substantive changes effective on June 1, 2016, are: Instead of $50,000 for medical and rehab plus $36,000 for attendant care for non-catastrophic injuries, the policy change drops to a total of $65,000, a 25 per cent decrease. For catastrophic injuries, instead of $1 million for medical and rehab and $1 million attendant care, the total for both is now $1 million.
Adam Bari appears to be caught between those changes on both diagnosis and definitions, and benefit schedules. Arnold believes “their only recourse is to sue the responsible driver,” something the family is planning to do. The problem, of course, is the years a suit can take to wend its way through the system.
“Since June 1, I’ve urged all my clients to purchase the maximum amount of coverage available for medical, rehabilitation and attendant care for both non-catastrophic and catastrophic injury,” says Arnold. “For a good driver, the average additional premium is $120 per vehicle, in some cases it’s only charged per policy. It is well worth this additional premium.”
Every Ontario policyholder should be having a discussion with their insurance provider to review their requirements for Accident Benefit buy-up options. There are seven components to consider, not just medical, rehabilitation and attendant care: income replacement, caregiver housekeeping and home maintenance, dependant care, funeral and death benefit, indexation and tort liability deductible.
The changes are part of a government promise to bring insurance costs down. While fraud must be identified and stopped, consumers need to understand the impact of what they are actually paying for. Get out your policy and do a “what if” scenario; consider if you couldn’t do all the things you usually do while you recover, consider if your income replacement would be adequate (it probably isn’t if you make more than $30,000 a year) and how a long recovery would impact your household. Many of us drive every day; collisions don’t have to be your fault for you to bear the fallout.
We’re inundated with fine print that many of us ignore or don’t understand. Your insurance renewals will come with announcements of these changes and schedules delineating standards and options. But as Arnold points out, “You can amend coverage at any time. Even if your policy isn’t subject to the new benefit schedule, you can request that it be cancelled and reissued with the new benefits and any optional buy-ups at any time without incurring a cancellation charge.”
Set aside some time and go over the fine print.