On June 1, 2016, the Ontario government introduced changes to automobile insurance coverage intended to help make insurance premiums more flexible and affordable. All owners of vehicles in Ontario must purchase a standard auto insurance policy (AIP). Generally the content of these AIPs is governed by the Insurance Act, which defines the benefit amounts required in standard policies sold in the province of Ontario. The changes, which apply to all AIPs with an effective date or renewal date of June 1, 2016 or later, allow policies to become more tailored to an individual’s needs.

What is the same?

All AIPs will continue to include coverage regarding Third Party liability, uninsured automobiles, direct compensation-property damage and accident benefits. However, if you have previously chosen to purchase optional benefits, check your policy. Depending on the benefit, the amount of that benefit may have changed to reflect amounts available in the new options.

What has changed?

• Minor Accidents: Minor at-fault accidents, that occur on or after June 1, 2016, can no longer be used by insurers to increase your premiums so long as no payment has been made by any insurer, there are no injuries, damages to each car and property were less than $2,000 per car, and were paid by the at-fault driver. This provision is limited to one minor accident every three years.
• Non-Earner Benefits: The six-month waiting period to receive benefits for people who are not working has been reduced to four weeks. However, benefits can only be received for up to two years after the accident.
• Deductibles Increased: The standard deductible for comprehensive coverage has been increased from $300 to $500.
• Lower Interest Rates: The maximum interest rate that insurers can charge if you make monthly premium payments has been lowered from 3% to 1.3% for one year policies, with corresponding reductions for shorter terms.
• Standard Medical, Rehabilitation and Attendant Care benefits for catastrophic injuries have had their combined benefit reduced from $2,000,000 to $1,000,000. Non-catastrophic injuries have had this combined benefit reduced from $86,000 to $65,000 and the benefit for minor injuries is now fixed at a maximum limit of $3,500. For all adult claimants, the amount of time this benefit can be received is now five years for non-catastrophic injuries thought it will be paid only where the person remains medically eligible.
• Optional benefits for Medical, Rehabilitation and Attendant Care have also changed. There is now a combined medical, rehabilitation and attendant care optional benefit of up $130,000 for non-catastrophic injuries and a new option to purchase an optional benefit of $1,000,000 for catastrophic injuries.​ The previous $1,000,000 optional benefit for all injuries (non-catastrophic and catastrophic) remains unchanged.

Other Optional Benefits Now also Include:

• Income Replacement benefit: New option to increase the weekly benefit limit from $400 to $600, $800 or $1,000 per week.
• Caregiver benefit: Previously this optional benefit was limited to catastrophic injuries, but this new option is available for all injuries.
• Housekeeping and Home Maintenance expenses: Previously this optional benefit was limited to catastrophic injuries, but this new option is available for all injuries.
• Death and Funeral benefit: New option to increase the benefit from a $20,000 to $50,000 lump sum payment to an eligible spouse, and from $10,000 to $20,000 for each dependant.
• There are now also optional benefits for Dependant Care, increased Third Party Liability maximums and reduced Tort Deductibles.

How to Stay Protected?

Whether you are buying a new policy or renewing an existing one, you should be aware of how these changes may impact you.To ensure you have full peace of mind and have all the coverage you need, your best option is to take the time to get to know your policy and speak directly with your insurance provider where you have any questions or concerns. Consider if you have previously purchased enhanced options and look to see how these are reflected in your new policy. Make sure you know what options are available to increase or purchase other benefits, or to reduce premiums by increasing deductibles or taking advantage of discounts. Do not be afraid to shop around and ask for quotes to compare coverage, service and rates. You can also consider purchasing your insurance through a broker. An insurance broker can help you assess your needs, understand your coverage options and provide you with quotes from different insurers.

For any further information regarding the changes to auto insurance in Ontario, contact the Insurance Bureau of Canada or the Financial Services Commission of Ontario.

Kate Agyemang

Law student