Lawyers say they expect disputes with brokers and less coverage for non-drivers involved in accidents
Since July 1, when certain accident benefits that had long been baked into Ontario’s standard auto insurance policy became optional, members of the Ontario Trial Lawyers’ Association have noticed a new type of client looking for guidance: non-drivers who have been in a car accident, but cannot access benefits because the driver in the accident opted for less coverage under the province’s new auto insurance regime.
That’s according to OTLA president K. Jay Ralston, who could not share details about specific cases due to solicitor-client privilege but said they involve people who don’t have the option to buy auto insurance coverage, like pedestrians and cyclists.
“That’s one of our biggest concerns, is that [the Ontario policy change is] eliminating not only benefits in certain circumstances, but a lot of the people that would otherwise have been entitled to the benefits have no option to even opt in,” Ralston says.
“Many people in Toronto don’t even drive anymore – they are getting around on TTC and they’re getting around on bicycles and walking,” he adds. “They have no auto insurance that they can even opt into to be covered by those benefits.”
The Ontario Automobile Policy – the standard auto insurance contract that’s mandatory for drivers in the province – has long included certain benefits to support policyholders if they get into an accident. On July 1, Ontario enacted changes to its Statutory Accident Benefits Schedule so that the majority of these benefits are no longer automatically included in a standard policy.
These include, but are not limited to, benefits that replace the policyholder’s income, cover caregiving expenses, pay for housekeeping and home maintenance expenses, cover the costs of repairing or replacing personal items, compensates certain family members if the policyholder or another covered individual dies, and cover certain funeral costs.
Standard medical, rehabilitation and attendant care benefits will continue to be included with the OAP.
As a result of Ontario’s changes, insurance companies are also now first in line to cover medical and rehabilitation costs. Previously, Ontario residents seeking coverage for the costs associated with a car accident had to first exhaust the benefits available through their workplace or private health plan before their auto insurance benefits would kick in.
Explaining these changes to its auto insurance regime in its 2024 budget, the Ontario government said they are meant to simplify the claims process and give consumers more choice about how they spend their money.
But seven weeks out, Ralston says the OTLA can already anticipate some of the long-term challenges that will result from Ontario’s policy shift. In cases where non-drivers are involved in car accidents with drivers who have opted for minimal accident benefits, for example, the organization expects “the loss transfer will essentially go to the province,” he says.
“Rather than being covered by the auto insurers, [these people] are going to be covered by the Ontario government and ultimately the taxpayer,” Ralston says, referencing provincial assistance programs like the Ontario Disability Support Program.
Nick Todorovic, a partner at McLeish Orlando Lawyers, says the fallout of the July 1 changes for his practice has so far been limited to making sure his clients are getting the coverage they need under the new insurance regime.
However, he also expects to see challenges in the coming months and years. One major concern is that brokers will fail to properly notify their clients of the new insurance regime, which could lead to inadequate coverage. “You could see a series of broker negligence claims coming through, especially as it relates to individuals that are more seriously injured and really need access to these optional benefits now that are not available to them,” Todorovic says. Ralston agrees claims against brokers will likely become more common.
The OTLA has repeatedly tried to raise their concerns with the province. Last fall, the organization met with more than 40 Members of Provincial Parliament to present recommendations on how to maximize drivers’ uptake of optional accident benefits; one recommendation proposed including those benefits in standard auto insurance contracts by default, and giving drivers the ability to opt out, Ralston says.
The organization has also requested meetings with Premier Doug Ford and Finance Minister Peter Bethlenfalvy, but have not succeeded.
Todorovic says there are some positive aspects of the July 1 changes: because insurers are now first in line to pay out accident benefits, that will streamline the process for policyholders. Housekeeping and home maintenance benefits, which were previously only available in cases involving catastrophic injuries, can also now be claimed by drivers who opt to buy them even in cases where they aren’t catastrophically impaired.
Still, both lawyers are unsure that the option to pay for less coverage is actually saving Ontario drivers much money.
In many cases, opting for less coverage only results in a “marginally smaller premium,” Todorovic says. And when the people who opt to pay for less coverage find themselves needing “income replacement benefits or non-earner benefits, well, that’s a bucket of money of benefits that they don’t have access to now because of that,” he adds.
