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Car Accidents & Accident Benefits Insurance in Ontario: What you never knew but need to know

Earlier this week I was at lunch with a good friend of mine. He was involved in a car accident a few weeks ago. I (Brian Goldfinger) was the ideal person to lunch with because we could talk about my primary area of practice, personal injury law.

While my friend was driving around his subdivision, another driver ran a stop sign and t-boned his vehicle travelling at high speeds.

My friend’s vehicle was virtual write off; although the insurer is doing everything in their power to salvage the vehicle. It’s cheaper for them to pay for the labour and parts than it is to purchase a new vehicle.

My friend’s air bags deployed. He was knocked unconscious for a period of time. How long is uncertain.

My friend told me how hard the other guy’s insurance company was fighting with him. This seemed odd because the car accident only happened a few weeks ago, and here in Ontario, we have a no fault accident benefit system which is supposed to take away that fighting between the innocent accident victim and the other driver’s insurance company at such an early stage. If there is to be any fighting or disagreement, this would take place at a much later stage.

When I pointed this out to my friend, he was not sure which insurer he was dealing with. He believed that the at fault driver’s insurance company was taking care of everything.

He mistakenly believed that the at fault driver’s insurer was paying for the damage done to his vehicle, the damage to his phone and glasses in the accident, the cost of the rental car, the cost of the medical treatment he would need, the cost of the attendant care benefits and the cost of the income replacement benefits.

When I told my friend that having the at fault driver’s insurance company pay for these items is NOT how Ontario’s no fault accident benefit system works. I pointed out that in Ontario, your even though you’re not at fault, it’s your OWN INSURER which pays for these expenses. The end result is that you are in a battle with your own insurer, and your own insurer is in a conflict position. On one hand they have an obligation to treat their insurer with utmost fairness. But on the other hand, they want to make money. The more money they pay out in benefits, the less money they get to retain in profits. My friend looked at me dumbfounded said “well that’s just stupid and isn’t fair at all. That’s not right. You should go to the papers.”

I then told my friend that Ontario has been running this system since the 80’s; and year after year, this system has been chopped down to take away your rights and increase insurer profits. The system was and remains rigged against innocent accident victims in favour of large, deep pocketed insurers. When my friend heard this, he began to get mad.

But how could this happen? Why was the system rigged against innocent accident victims.

I then pointed around the restaurant. There were about 15 people there during the lunch time rush. Of all of the patrons at the restaurant, he was likely the only one who had recently been involved in a car accident. He was likely the only one in the restaurant with an live accident benefit claim.

The patrons at the restaurant don’t care about my friend’s pain, suffering, quantum of med/rehab benefits or his struggles making ends meed following the car accident. All the people in the restaurant cared about when it came to car insurance was how much they were paying. The lower the premiums, the better.

My friend was in the minority. The majority doesn’t care and doesn’t even want to hear about his sob story. All that matters for the majority is the bottom line in terms of how low can premiums go.London-Head-Shot-Brian-Goldfinger-201x300

Unfortunately, this attitude is all too common. But, it’s short sighted and here’s why:

  1. Ontario driver’s are paying more, and getting less! Like going to the grocery store, and paying 1.5x more for 75% less groceries. Any other industry other than car insurance, there would be riots
  2. You never think about insurance until it’s too late. If a serious accident happens to you or a loved one, better make sure you have a good personal injury lawyer to help you with your claim. Given the reductions in the system, all too often innocent accident victims are fighting an uphill battle where the cards are stacked against them
  3. Insurers are profiting on the reductions to your car insurance coverage! A recent study completed by York University Schulich School of Business Professors Fred Lazar and Eli Prisman, reveals that 2013 alone, consumers likely overpaid by $840 million. Consumers in Ontario may have overpaid for auto insurance by between $3 and $4 billion over the period 2001 to 2013.
  4. Reduced auto insurance coverage creates an addition burden on the public health care system; which you ultimately pay for! Why are Ontario tax payers giving insurers a free ride? Why should tax payers flip the bill on what private sector insurers are refusing to pay, in the very industry they operate in?!?!?

I further explained to my friend that these disadvantages to the consumer are only the tip of the iceberg. I began to explain to him about the $37,360 deductible for pain and suffering awards (show me a juror who has $37,360 of free cash sitting around in their bank account. This sum is ridiculous). I then explained that a personal injury lawyer was not allowed to explain the concept of the deductible to the jury because it would taint their decision and the Judge would declare a mistrial. I explained how there were no longer any meaningful cost awards at the License Appeals Tribunal so there was no incentive for an insurer to settle an accident benefit claim in a reasonable period of time. I explained how there was verbal threshold for pain and suffering awards in car accident claims. I explained the draconian rules for set offs, pre judgment and post judgment interest. And I continued to explain.

When all was said and done, my friend had lost his appetite. None of this was fair. None of this was right. I don’t blame my friend for not eating. Sometimes, even a personal injury can’t stomach it….

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