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Mar 2023

Automobile Insurance and Optional Benefits - Are You Sure You Are Covered?

By Kevin Souch

For years, driver’s in Ontario enjoyed numerous insurance coverage benefits that were available should they ever be injured in a motor vehicle accident. Over time insurance companies, with the government’s assistance, have been stripping away many benefits that were once included with your standard automobile policy and have been offering them back for an increased premium. In addition, rather than have benefits increase with inflation they have opted to maintain past levels while offering increased coverage for an additional premium.

Most people are unaware there are additional or optional benefits available until they have been injured in a motor vehicle accident and by then it’s too late. It is important that you discuss with your insurance representative these optional benefits to ensure that you have the coverage you need. It is also important that you consult with an experienced personal injury lawyer to discuss your rights if you have been injured.

The minimum amount of liability coverage required in Ontario is $200,000.00. It is recommended to most people seeking insurance that they purchase at least $1,000,000.00 in coverage. Given the current environment $1,000,000.00 in coverage may not be enough. If you injure someone in an accident your insurer will protect you up to your policy limits and you will be responsible for anything over and above the limits. This can be devastating and is a good reason you should carry $2,000,000.00 in liability coverage (and consider an umbrella package for more coverage). This is helpful in two ways. First, it decreases the likelihood that you will be personally responsible for damages to another motorist. Second, if you have $2,000,000.00 in coverage and are injured by another motorist who has limits of $1,000,000.00 you can turn to your own insurer to compensate you for any damages in excess of the other driver’s limits up to your own limits. This is known as underinsured coverage in a tort claim and if you are injured and can no longer work it may be vitally important.

As part of the accident benefits available through your own insurer you are entitled to income replacement benefits if you are unable to return to work. These benefits are capped at 70% of your gross weekly income up to $400/week for the standard benefit. This is not sufficient for most people so there is optional coverage that can increase this amount in increments of $200.00 up to $1,000.00 per week. Consider what you would need to maintain your standard of living and choose the coverage that provides the best protection. Also consider the availability of any workplace disability insurance. There are laws preventing double recovery so a good disability policy may negate the need for increased coverage.

Medical and rehabilitation benefits are now combined with attendant care benefits and are capped at $65,000.00 (lifetime) for non-catastrophic injuries. Previously there was $50,000.00 in med/rehab benefits and $36,000.00 for attendant care benefits for these injuries and prior to that (in 2010) there was $100,000.00 in med/rehab plus attendant care. In a time where the costs of treatment and care are increasing your coverage is decreasing. There are optional benefits to increase this coverage to $130,000.00 or, $1,000,000.00 in coverage for all injuries whether catastrophic or not. It is recommended to increase this coverage to $1,000,000.00 for all injuries.

Housekeeping/home maintenance benefits used to be available for all injury categories but are now only available for catastrophic injuries. You can purchase optional coverage to make housekeeping available for all injuries. There are further optional benefits available including Caregiver Benefits which provide money for care of dependents if the person who normally provides this care is injured and cannot do so. This is available now for catastrophic injuries but can be purchased to include all injuries. There are options to increase death and funeral benefits, to purchase an indexation benefit that will increase certain benefits with inflation, to reduce the tort deductible payable from approximately $45,000.00 down to $10,000.00 (see our website for a discussion on the tort deductible), and dependent care benefits can be purchased.

It is important to discuss your options with your representative to make sure you have the coverage best suited to your needs. Most of these optional benefits are available for surprisingly modest increases in premiums. You don’t want to discover that you have inadequate coverage when it’s too late. As mentioned above, it is extremely important that you discuss your rights and options with an experienced personal injury lawyer if you have been injured in a motor vehicle accident.