The problem with car insurance in Ontario: Reasonable Doubt

June 13, 2018
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From NOW Magazine's Reasonable Doubt column: Car insurance has been a difficult puzzle for Ontario governments. Thousands of people are seriously injured each year in car accidents and hundreds are killed. The majority of these accident are preventable and caused by driver negligence or recklessness, particularly distracted driving.

In 2013, a minority Liberal government needed the support of the NDP to pass their budget. The NDP forced the Liberals to promise a 15 per cent reduction to auto insurance premiums. The proposed cut would have saved the average Ontario household $225 per year.

The NDP and Liberals were right to be concerned about car insurance premiums. Ontario has the highest rates in the entire country despite having removed nearly all of car accident victims' rights to compensation.

An auto insurance system should be hard on reckless drivers and provide full support and compensation for accident victims while rooting out and punishing fraud. That is not the approach taken in Ontario.

Ontario has a largely "no-fault" auto insurance scheme, meaning the government has removed the right to compensation for the vast majority of victims injured in car accidents.

Before someone injured in a car accident can receive compensation for their pain and suffering or future medical expenses they must first have suffered a injury that causes a "serious and permanent" impairment - a high threshold to meet. This threshold removes the right to sue for the vast majority of people injured in a car accident. There is also a deductible for pain and suffering damages in all but the most serious injuries.

Since the Liberals' 2013 promise to reduce rates, accident victim rights have been eroded several times.

In 2015, the Liberal government increased the deductible from $30,000 to be indexed with inflation, making it now $37,983 on pain and suffering awards. This means that if you are awarded $40,000 in pain and suffering damages, then you only receive $2,017. If you are awarded $30,000 in pain and suffering damages, then you receive nothing despite having suffered a serious and permanent injury.

In 2016, the Liberals cut benefits again, with treatment funds for catastrophically injured people - such as people with severe brain injuries or quadriplegia - being cut in half. Liberals also restricted treatment funding for people with whiplash - even people who have developed lifelong and disabling neck and back injuries - to $3,500.

Read more: The problem with car insurance in Ontario: Reasonable Doubt