April 16, 2019

Putting Drivers First? The Government’s Blueprint for Insurance Reform Revealed

Early this year, the government asked for public input into the future of auto insurance in Ontario.  We were cautiously optimistic that they wanted genuine participation from the people most affected by any reforms.  However, now that the “Blueprint” has been published as part of the 2019 Budget, it is clear the Liberals have little interest in putting drivers first.

The sub-title, “Listening to the People” ironically starts with a quote from George Hardy, Vice-President,Home and Auto Insurance, The Co-operators:

“We commend the government’s recent auto insurance consultation asking drivers to provide feedback on their insurance needs, and with the government’s stated commitment to review how auto insurance rates are regulated. We agree that reducing costs from the system requires a focus on initiatives that will reduce red tape, address road safety, and combat escalating claims costs. We stress that changes to territory segmentation alone will not resolve the cost challenge for Ontario drivers. We must remove costs from the system. Reduced costs will ultimately result in savings that will be passed on to consumers.”

Then the results of the consumer poll are provided:

The Ministry of Finance posted an online survey about auto insurance from January 8 to February 15, 2019. The government received over 51,000 responses, of which:

  •  68% agreed that insurance providers should have more electronic or online tools available, like banks and other financial institutions;
  •  60% said shopping for and buying auto insurance is difficult and frustrating;
  •  55% said it was too difficult to tailor their auto insurance policy to meet their needs;
  •  54% reported that insurance policies are complicated and difficult to understand; and
  •  53% said it takes too long to receive benefits after being injured in an accident.

No discussion of the impact these findings have had on the proposal is provided. The results are so general that it is obvious that there was none.  While 51,000 responses sounds significant, it represents a tiny sample of the millions of drivers in Ontario.

Having dealt summarily with the “public participation” charade, the Blueprint sets out the programme recommended in large part by the 2017 Marshall Report: “Fair Benefits Fairly Delivered”.  This report is referenced in passing but not directly discussed. It offers 35 recommendations, most of which are incorporated into the Blueprint.

Positive changes to the existing system include: reversing the 2016 reduction to the default benefit limit for CAT claimants (from $1 million to the pre-amendment $2 million), and reform to the “flawed medical assessment process to bring credibility and accountability to the assessments that injured claimants must undergo after an accident”.

While these are important and beneficial changes for accident victims, they are far outweighed by thenegative reforms described in the Blueprint.

The Blueprint uses deliberately vague language couched in terms of “choice” and “convenience” to disguise a major part of its larger, pro-insurer agenda- to reduce the role played by personal injury lawyers in advocating for the rights of accident benefits claimants, to limit claims and settlement amounts.

The reforms will provide an, “improved early treatment system for common injuries, including mental health treatment”.  While this sounds fine, it actually involvesextending the scope of the Minor Injury Guideline (MIG), which has been used by insurers as a means of frustrating and disentitling claimants since its introduction.   Currently, psychological injuries are one of the grounds for challenging the MIG. The reforms will include “mental health treatment” under the pre-approved framework and provide another weapon for insurer to deny necessary care to injured claimants.

The governmentwill institute a “Care, Not Cash” default clause to the mandatory insurance contractthat this will, “ensure that a driver’s auto insurance coverage will pay for treatment instead of costly legal fees while giving the driver the option to be eligible to receive cash settlements if they so choose”. This insidious proposal will remove your right to enter a dispute with your insurer AND deny you the expert representation you will nee to negotiate a fair settlement of your claim.  This will benefit only your insurance company.

As well, the reforms will interfere in the contractual relationship between lawyer and client, potentially abolishing the contingency fee relationship that provides most accident victims with the ability to sue the at-fault driver or dispute their entitlement to accident benefits with their insurance companies.  Should you recognize the danger in defaulting to “Care, not Cash”, you may not have the financial resources to hire a lawyer anymore.

Moreover, the reforms will,“increase the monetary limit of simplified procedure trials”.  This is presented as a benefit to consumers but the impact on premiums will be negligible.  This procedural change might facilitate more efficient processing of disputes. However, jury trials are one of the few advantages that an injured plaintiff possesses in a civil trial, and a right that we all possess in this province.  Saving money for insurance companies is not a legitimate reason to place additional restrictions on this right.

The full extent of the impact of these and other changes proposed in this Blueprint is not yet known.  More than ever, once these reforms are implemented, you will need to seek expert legal advice in your fight against an increasing unfair accident benefits regime.  If you have been seriously injured in a car accident and have questions about the impact of the Liberal Blueprint or your claim in general, we are pleased to offer a free consultation.  Campisi LLP– Clients First, Excellence Always!

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