How Changes to Auto Insurance Impact Brokers

1. How Changes to Auto Insurance Impact Brokers James L. Vigmond, Partner Robert M. Durante, Partner Bill Kirwin, Accident Benefits Specialist Steven Smyth, Accident Benefits Specialist

2. HOW CHANGES TO AUTO INSURANCE IMPACT BROKERS • What are the changes? • What effect does it have on third party liability limits? • The duty to inform myself of my insured’s needs • The “deep pockets” effect

3. What Are The Changes? • The amount of available benefits are dramatically reduced • Threshold for meeting CAT impairment is dramatically increased … a toxic combination

4. Available Benefits – Non-CAT

5. Available Benefits – CAT

6. Enhanced Benefits are Available

7. Changes to Catastrophic Impairment Most frequent before changes: • Glasgow Coma Scale of 9 or less • 55% Whole Person Impairment • A single marked mental/behavioural impairment

8. Post-June 1st, 2016 • No Glasgow Coma Scale • Use of 6th edition of guides artificially & dramatically reduces assessment for mental/behavioural disorders • Requires 3+ marked mental/behavioural impairments • Very few people will qualify for Catastrophic Benefits • Requires positive imaging for adult brain injury

9. Interplay of A/B and Tort • Tort gets credit for available benefits • Abundant benefits decreases tort exposure • Scarce benefits increases tort exposure • Plaintiffs will identify targets with deep pockets

10. The Duty to Inform Myself of Insured’s Needs • Arises from obligation to give advice • Existing renewal practice conflicts with duty established in case law • “What did my insurance broker recommend?” • Affects third party liability limits • Affects enhanced limits for accident benefits • The insurance broker will become the next “deep pocket”