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Ontario Auto Reform and how it will affect you

Ontario Auto Reform and how it will affect you. Prepared for: University of Windsor Faculty Association Presented by: April Pittendreigh, BA, CAIB, CIP. Stevenson & Hunt Insurance Brokers Limited. September 6, 2014. Agenda. New Regulations

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Ontario Auto Reform and how it will affect you

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  1. Ontario Auto Reform and how it will affect you Prepared for: University of Windsor Faculty Association Presented by: April Pittendreigh, BA, CAIB, CIP Stevenson & Hunt Insurance Brokers Limited September 6, 2014

  2. Agenda • New Regulations • Accident Benefits coverage – limits and options • Priority of Payment • FAQ’s

  3. New Regulations • Effective September 1st, 2010 • Coverage reduced to new Standard on renewal • New SABS (Standard Accident Benefits) limits • New Tort Deductible options • SABS procedures September 1st

  4. So……. • What changes are taking place September 1, 2010?? (note, with some exceptions, changes will not affect you until your first policy renewal following September 1, 2010).

  5. Income Replacement Benefit Prior Sept 1st SABS • Based on 80% net weekly income up to a maximum of $400 September 1st SABS ▪ Based on 70% gross weekly income up to a maximum of $400 ▪ Options increase weekly maximum limit to $600, $800, or $1000. Settlement still based on 70% of gross weekly income SABS: Standard Accident Benefits

  6. Non Earner Benefit Prior Sept 1st SABS • $185 per week first 104 weeks ▪ $320 per week after 104 weeks (complete inability test) September 1st SABS ▪ $185 per week first 104 weeks ▪ $320 per week after 104 weeks(complete inability test) No Change SABS: Standard Accident Benefits

  7. Caregiver Benefit Prior Sept 1st SABS • $250 w/ + $50 each additional dependent ▪ Available for any impairment September 1st SABS ▪ $250 w/ + $50 each additional dependant ▪ Only available if claimant suffers a Catastrophic Impairment ▪ New option – caregiver, housekeeping, and home maintenance for non-cat impairments – No standard cover

  8. Catastrophic Impairment • Paraplegic or quadriplegia • The total and permanent loss (loss of use) of an arm or leg • Total loss of vision in both eyes • A score of 9 or less on a Glasgow Coma Scale within a reasonable period of time • A score of 2 or 3 on a Glasgow Outcome Scale more than six months after the accident • Impairment of 55% or more of the whole person

  9. Medical and Rehab Benefit Current SABSSeptember 1st SABS ▪ $100,000 for non – ▪ $50,000 for non-catastrophic catastrophic impairments impairments ▪ $1,000,000 for catastrophic ▪ $1,000,000 for catastrophic ▪ Limits exclude assessment ▪ Limits include assessment costs - $2,000 max/assessment → Limits reduced by 50% → New $3,500 maximum Minor Injury limit for Medical Expenses → New option – Medical/Rehab benefit “buy back” to $100,000 SABS: Standard Accident Benefits

  10. Attendant Care Benefit Current SABSSeptember 1st SABS ▪ $72,000 for non-catastrophic ▪ $36,000 for non-catastrophic impairments – $3,000/mth impairments -$3,000/mth ▪ $1,000,000 for catastrophic ▪ $1,000,000 for catastrophic - $6,000/month - $6,000/month → Limits reduced by 50% → New option – Attendant Care benefit “buy back” to $72,000 → Minor Injury claimants do not qualify SABS: Standard Accident Benefits

  11. Current SABS vs. September 1st Medical, Rehabilitation, and Attendant Care ▪ Option to buy up three coverage’s as a package at $1,000,000 Important considerations: ▪ Potential 1 year gap for attendant care – 3K/month * 12 = 36K ▪ Coverage provided under this optional coverage for listed drivers only

  12. Current SABS vs. September 1st Current SABS • Death and Funeral Benefit ▪ $25,000 to spouse, $10,000 each dependant ▪ $6,000 funeral expenses September 1st SABS • Death and Funeral Benefit ▪ $25,000 to spouse, $10,000 each dependant ▪ $6,000 funeral expenses ▪ No Change SABS: Standard Accident Benefits

  13. Other Options ▪ **Indexation Benefit (no change) ▪ Death and Funeral (no change) ▪ Dependant Care (no change) - $75 for first, $25 each additional, max $150/week (this is a buy-up of the Caregiver Benefits)

  14. Post Sept. 1st Renewals • Policies issued on or after Sept. 1st, now lower SABS apply • Policies issued before Sept 1st, old limits honoured until renewal following Sept. 1st • Execution of claims process will still change for claims occurring on or after Sept. 1st • Any accident occurring prior to Sept. 1st, old SABS procedures apply. SABS: Standard Accident Benefits

  15. Post Sept. 1st Renewals • Broker or Insurer cannot issue policy with new options exercised to bring policy to old standard ▪ Ministry of Finance clarified this as “negative option billing” ▪ All options sold must be presented to consumer to make an informed decision

  16. Post Sept. 1st Renewals Any options already exercised by the consumer will continue through the renewal i.e. a consumer has purchased increased income replacement benefit with a limit of $800 i.e. a consumer has purchased the increased medical/rehabilitation and/or attendant care. Their renewal following September 1st will still contain this option

  17. Post Sept. 1st Renewals If no options have been purchased under the AB section, the renewal will contain only the new Standard Policy AB limits AB: Accident Benefits

  18. Sept. 1st Renewals • Policy holders able to buy down their existing policy limits to new standard on September 1st if their policy renews prior ▪ Policy holders may want to discuss possible cost savings by reducing their coverage before their renewal

  19. SABS Processes & Procedures Effective September 1st for all….. SABS: Standard Accident Benefits

  20. New SABS – Other Notes • WAD 1 (Whiplash Association Disorders) and WAD 2 definitions removed • Will be included in new Minor Injury Guideline SABS: Standard Accident Benefits

  21. Minor Injury Limits • Claimants meeting the Minor Injury definition will only be eligible for $3,500 ▪ Claimant’s doctor can present “compelling evidence” if higher limits are needed

  22. Minor Injury Limits Minor Injury Definition: sprain, strain, whiplash associated disorder, contusion , abrasion, laceration or subluxation (partial or complete dislocation of a joint) and any clinically associated sequaelae (other pre-existing conditions).

  23. Tort Deductible • Introduces an option for consumers to purchase an endorsement that provides first-party coverage to reduce the tort deductible for pain and suffering awards to $20,000 from $30,000 and to $10,000 from $15,000 for Family Law Act (FLA) claims.

  24. Direct Compensation Deductible • Direct Compensation – new coverage introduced under “no fault” – similar to collision coverage, but for accidents that are not the insured’s fault • $500 is new standard (was $300, although most clients bought deductible down to $0) • Option is still available to buy DCPD (Direct Compensation Property Damage) deductible down to $0 • Renewing policies will maintain their existing deductible DCPD: Direct Compensation Property Damage

  25. Other Changes • <25% AF rating no longer ratable • $2,500 maximum for accountant fees - when calculating the eligibility for an Income Replacement Benefit (IRB) claim. AF: At Fault Accident

  26. Other Changes • 40/10 – Amends 777/93Statutory Conditions - Auto • This regulation amends the “appraisal” condition - an insurer can no longer deny an insured who wants to pursue the appraisal option if dissatisfied with the valuation determination.

  27. Documents to Educate • 3 mailers to be sent to customers to educate them on the changes • 1. Early Awareness Mailer • 2. Point of Sale Document • 3. New Regulation Mailer • The first two of these are legally required to be sent by insurers. The third can be sent by either insurer or broker.

  28. Priority of Payment • Various sources of benefits may be available • Disability Policy • Short-term/Long-term Disability • Worker’s Compensation • Automobile Accident Benefits • Typically Ontario Auto Accident Benefits would be the last to pay, however if WSIB, the insured must choose between AB and WSIB AB: Accident Benefits; WSIB: Workplace Safety and Insurance Board

  29. Priority of Payment • If the insured is seriously injured and meets the definition of “threshold”: “Death, or Suffered a permanent serious disfigurement, or suffered a permanent serious impairment of an important physical, mental or psychological function.” • If third party is responsible for the accident, and insured meets threshold, insured can sue for Pain and Suffering. • No Threshold is required to sue for Economic Loss • Amounts paid out under Accident Benefits will reduce the amount paid out under lawsuit.

  30. Priority of Payment • If you have a disability policy in place, Accident Benefits may “top up” Income but will not pay over 70% of gross income (total).

  31. Q&A Questions?

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