Time for a Shift in Auto Insurance

by Kris Bonn

For the first time in 15 years the Liberals are no longer the party in power in Ontario. When the Liberals
came into power in 2003, Ontario had a generous mandatory no-fault accident benefits for those
injured in automobile crashes and corresponding limits on innocent victims' right to sue at-fault drivers
in tort. Over the past 15 years this quid pro quo has been eroded: no-fault benefits have been slashed
while the rights for innocent victims to sue in tort have been further limited. It is a double whammy for
Ontarians, reduced no-fault benefits and limited rights to sue in tort.

The only winners in the past 15 years in auto insurance in the Province of Ontario have been the private
insurance companies. As reported by economics professor Fred Lazar of York University’s Schulich
School of Business, insurers in Ontario have raked in approximately $5 billion in pre-tax income from
2011-2016, including an estimated $1.5 billion in 2016. Lazar writes in his report, “Given the levels of
excessive profitability, consumers almost certainly have paid too much for their insurance coverage.”
The system is clearly broken. It is time for a fundamental change.

The place to start is by eliminating the punitive and unfair limitations placed on injured victims’ right to
compensation in tort. From my experience representing injured victims for the past 16 years, almost no-
one is aware that if you are innocently hurt by another driver, your right to compensation is severely
limited. Consider the following:

  • Before you are eligible for compensation for your pain and suffering, you must prove with
    medical evidence that you have suffered an injury that will never go away and that your injuries
    from the crash caused a serious impairment to your ability to participate in most of your
    important daily activities. If you can’t meet this test, even if you live with pain for the rest of
    your life you get zilch, nada, nothing for your pain.
  • If an injured person manages to get over the threshold, there is an arbitrary deductible that is
    automatically applied to pain and suffering damages. In 1996 the deductible was $15,000, in
    2003 it was increased to $30,000 and in 2015 it was increased for inflation to $36,540 and
    continues to increase every year. Currently, for 2018 the deductible is $37,983.33 and unless
    there is a change in the law will continue to increase every year.
  • Income loss is capped at 70% of your gross income. For example, if you were earning $1,000 a
    week at the time of the crash and cannot continue working due to your injuries, in tort you are
    limited to 70% or $700 a week for your income loss.

The only purpose for these limits on innocent victims’ right to compensation is to increase insurer’s
profits – and boy, as Lazar confirms it has worked. It is time for a fundamental shift in auto insurance in
Ontario. Time to stop limiting innocent victims from fair compensation. I call on Doug Ford and the PC
Party to eliminate the artificial and arbitrary limitations on tort recovery for auto insurance cases. It is
time to go back to pure tort – if you can prove a loss you should be compensated for that loss. That is
only fair and just.

Kristian Bonn, Bonn Law