On the heels of the report that auto insurers are making billions of dollars in Ontario, the Liberal government has announced further massive cuts to benefits guaranteeing that auto insurers will make billions more in insurance premiums! For those most seriously and critically injured, the changes are drastic — a 50% reduction in coverage. There will also be changes to make it more difficult for injured victims to qualify for the enhanced coverage. The reductions include:

• Coverage available for catastrophically impaired victims will be reduced from $1 million each for medical and rehabilitation benefits and attendant care benefits to $1 million for both of these benefits combined. There is an option to pay extra to get the $2 million coverage.
• For non-catastrophic standard benefits, the length of time for medical and rehabilitation benefits has been cut in half from 10 years to 5 years.
• The total coverage available for medical and rehabilitation benefits and attendant care benefits has been reduced to $65,000 from the current total of $86,000. There is an option to pay extra to increase this coverage to $1 million.

There is no need for these massive reductions to achieve a 15% reduction in our insurance premiums. The reductions in insurance premiums could be achieved by reducing the benchmark profit rate for insurers, which is currently 12% — much too high in our very low interest rate environment. If the benchmark rate for profits was reduced to a more reasonable 5.8% there would be more than enough room to cut insurance premiums by the mandated 15%.

All the discussion in the media is about reducing rates; the need to cut auto insurance premiums. What is missed is the need for benefits. What are we getting for our premium dollars? I am reminded of the Rick Mercer skit about paying for insurance and getting no benefits, which you can view by clicking here.

Sadly, this looks where we are headed in Ontario. We are paying greater insurance premiums for fewer benefits. At the current trajectory, in a few years we might actually be paying insurance premiums for no benefits. Yes, our insurance premiums might be reduced, but at what cost?

Kristian Bonn, Personal Injury Lawyer

Bonn Law Office, Trenton/Belleville, ON