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Ontario Auto Insurance is Changing

In 2014, the provincial government passed the Fighting Fraud and Reducing Automobile Insurance Rates Act to fight fraud and abuse within the system. In 2015, changes to Ontario’s auto insurance product were outlined in the Ontario Budget. Measures were put in place not only to combat fraud, but to provide greater choice for consumers and help achieve the Ontario governments’ promised rate reduction targets.

In a nutshell, new regulations include lower accident benefit limits in standard insurance policies, new options to increase coverage, new procedures for payment and a mandatory Winter Tire Discount (up to 5%) offered by insurance companies across Ontario.

Auto reform changes come into effect this year: the winter tire discount is effective as of January 1st while most changes come into effect June 1st.

Why does any of this matter?

Car insurance can sometimes come with negative connotation – monthly expenses could be used elsewhere (for that vacation you need, for example). It’s perhaps only at renewal when you might think about the greater issues at play: insurance as a safety net, protecting against risk; insurance as a critical factor in individual and collective welfare. If you, a friend or loved one is involved in an accident, it’s at that point your outlook changes to one of appreciation. What would have happened if a policy hadn't’t been in place?

The opportunity with this new set of measures is to step back and reflect on what you really need. Does your employer provide a Group Insurance Plan? Look into what your policy covers… most benefit packages are limited to $500/year per practitioner, which can be exhausted quickly even in cases of minor accidents. If you have children or elderly parents that depend on you, who would care for them if you were injured? If you had to hire someone to carry out household responsibilities, how would you subsidize the expense?

Standard policies are just that – standard. They don’t include benefits like dependant care, which reimburses additional expenses to care for your dependants. While auto insurance products are becoming more affordable for consumers, gaps might exist depending on your lifestyle. The good news is there’s opportunity to fill those gaps by increasing coverage or adding options to cover specific areas of your life. Purchasing appropriate coverage is an investment in your family, your children, your parents… ultimately it’s an investment in your lifestyle. What could be more important?


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Customize Your Auto Insurance

Due to recent changes to auto insurance in Ontario, it’s the right time to reassess the policy you haven’t thought about in years. Your insurance company will be sending you an update in the mail, and we’re here to follow up with a conversation about your needs.

Consumers should consider more than what’s offered in a standard insurance policy. There are favourable options depending on your lifestyle. Consider updating your policy if:

  • You’re a primary caregiver of young children, elderly parents or disabled family members
  • You earn more than $30,000 a year
  • You’re a snowbird
  • You’re responsible for housekeeping or home maintenance
  • You have a pre-existing injury that requires regular treatments like physiotherapy or massage
  • Your auto insurance policy is your only form of coverage (i.e. you don’t have a group plan through an employer or spouse)

If you suffer catastrophic injury from a car accident (loss of limb, para/quadriplegic), standard Accident Benefits provide $1,000,000 for medical, rehabilitation and attendant care expenses. If your injury is less severe (broken bones, strains), available coverage is $65,000. These standard benefits were reduced by the Ontario government to help stabilize rates and provide more choice to consumers, but it’s likely people will feel the impact of these reductions. In today’s society, what’s the value of a million dollars when the average price of detached homes in Toronto has risen 16 percent to $1.2 million? How far does a million dollars go, spread over a lifetime?

The good news is there are options. To become more financially prepared you can increase, extend and purchase additional Accident Benefit Coverage from your insurance broker depending on what you need – whether that’s increasing coverage, extending  it to cover minor injuries or adding benefits to cover unexpected cost. If you earn more than $30,000 a year, you can increase your income replacement coverage to $600, $800 or $1,000 (depending on your income).

While it’s convenient to obtain a quick quote online, that quote won’t provide the complete picture you need. Talk to your insurance broker about what’s changed in your life this past year. How has your family’s life changed? Instead of focusing on price, start with what your needs are, then weigh them from a price perspective together with other expenses to decide what’s most important.

Know your options! And talk to your insurance broker about customizing your auto insurance. It could be the best decision you’ve ever made.

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How Much Does An Injury Cost?

To make an informed choice about your auto insurance policy, you need to know what injuries resulting from car accidents can cost.

Health Care Professional Rates & Fees | A Guideline

Health Care Profession or Provider Maximum Hourly Rate except catastrophic impairments Maximum Hourly Rate catastrophic impairments*
Chiropractors $112.81 $135.36
Massage Therapists $58.19   $89.07  
Occupational Therapists $99.75   $119.92
Physiotherapists $99.75   $119.92
Podiatrists $99.75   $119.92
Psychologists and Psychological Associates $149.61 $179.29
Speech Language Pathologists $112.22 $134.17
Registered Nurses, Registered Practical Nurses and Nurse Practitioners $91.43   $109.24
Kinesiologists $58.19   $89.07  
Unregulated Providers
      Case Managers $58.19   $89.07  
      Family Counsellors $58.19   $89.07  
      Psychometrists $58.19   $89.07  
      Rehabilitation Counsellors $58.19   $89.07  
      Vocational Counsellors $58.19   $89.07  

*This rate applies to all services rendered on or after September 6,2014 to an insured person whose impairment is determined to be a catastrophic impairment as defined in the SABS whether such services are rendered before or after such determination is made.

Form Maximum Payable for Completion of Form
Disability Certificate (OCF-3) $200.00
Treatment and Assessment Plan (OCF–18) $200.00
Automobile Insurance Standard Invoice (OCF-21) $0.00
Source: FSCO Professional Services Guideline No. 0314
No Injury
Minor Injury

Probability: 46%

By far the most common type of accident in Ontario is your typical “fender bender” whereby no injuries are sustained.

Examples of Costs:

  • Repairs to your car
  • Rental car (look for “loss of use” coverage)
  • Contents from your car

Probability: 28%

Examples of a minor injury include sprains or whiplash. When injuries are deemed minor, medical and rehabilitation benefits are limited to $3,500 regardless of the level of coverage.

Examples of Costs:

  • Ambulance Fees ($45 - $200)
  • Short-term physiotherapy ($2,200 - $3,500) and could include physiotherapy, acupuncture or chiropractor
  • Doctor’s fees not covered by OHIP ($82-$200)
Serious Injury Catastrophic Injury

Probability: 22%

Examples include broken bones or severe sprains. These types of injuries could disrupt your life and require a longer period of recovery.

Examples of Costs:

  • Medical assessments ($2,000)
  • Examinations ($1,500 average)
  • Physiotherapy costs ($3,000 - $4,500 every 60 days)
  • Drug prescriptions ($25 - $100 per month)
  • Mobility devices (thousands of dollars and need to be replaced and repaired)
  • Care for your dependants (children or elderly parents, for example)
  • Training for your career (example: vocational specialist or occupational therapist)

Probability: Less than 5%

Examples: loss of a limb, paraplegia. Catastrophic injuries result in increased benefits. This is the most serious and unfortunate type of injury, resulting in long term or permanent disability. Although rare, the potentially overwhelming costs of this type of injury is why most of us buy insurance in the first place. The costs of helping you reintegrate back into society after this type of injury are much larger in scale and may be ongoing for the remainder of your life.

Examples of Costs:

  • The costs outlined under “serious injury” continue over the course of a lifetime
  • 24/7 attendant care ($6000 per month)
  • Modifications to your home could be required

The information contained above, including but not limited to, costs or probabilities, is for general information purposes only and is subject to change at any time without notice. This document has been designed as a learning tool whereby the information is provided to you on an “as is” basis without warranty, whether express or implied, including, but not limited to, the implied warranties of non-infringement, security or accuracy. The Insurance Brokers Association of Ontario (the “IBAO”) has made reasonable efforts to ensure that this information is current and accurate, at the time of writing however, it is your responsibility to evaluate the accuracy and completeness of all information contained within this document. Any reliance you place on such information is therefore strictly at your own risk. Under no circumstances will the IBAO be liable for any loss or damage caused by your reliance on information. This document contains proprietary information and shall not be used, disclosed or reproduced, in whole or in part, for any purpose other than its specified purpose, without the prior written consent of the IBAO.

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Winter Tire Discount 101

The Ministry of Finance issued a statement confirming all insurance companies including the Facility Association are required to provide a winter tire discount as of January 1, 2016. This was mandated by the Ontario Government in 2014 as part of their commitment to reduce insurance premiums.

You and your clients might have questions on implementation and things like how much money will be discounted. Take this opportunity to connect and help clarify some of the uncertainty that might arise surrounding the new initiative.

Are all discount amounts the same?
The actual discount is up to the insurance company, but regulators approve them – we’ve seen ranges from 2% to 5%. Some insurers will offer the discount only at certain times throughout the year. Each insurer is different so if there’s ambiguity within your office, reach out to your insurance markets for clarification.

What is your role as a broker to police your clients’ use/installation of winter tires?
While each company has communicated different requirements, it appears most companies are taking an honour system approach. Just like any other discount brokers verify, let documentation and data integrity be your guiding principal. While there’s no indication insurers are looking to micromanage their brokers’ documentation practices, we suggest you gather proof of winter tire installation up front so you’re protected in the instance of a claim dispute. Proof of winter tire installation could include:

  • A picture of winter tires on the vehicle
  • A purchase receipt for the tire
  • A purchase receipt for installation
  • Documentation validating verbal confirmation from your clients that they have winter tires on their vehicle

Is there E&O exposure if your client says they have winter tires, but don’t?
Under the statutory conditions, an insurance company could void your client’s policy for misrepresentation, but they’d more likely re-rate the policy and chargeback the additional premium to the consumer.

Do brokers need to ask clients about winter tires every year, or is it a one-time thing?
While communication isn’t mandated, it’s good practice to connect with clients multiple times throughout the year. This is a great opportunity to do so.

Is a mass mailing to clients required?
Winter tires are not mandated (the discount is optional) so there’s no required communication you must send. The initiative is designed to incent consumers to use winter tires and improve road safety during winter months. But as mentioned above, this is a great opportunity to touch base with clients and highlight safety and cost-saving measures.

The media references a 5% discount, which isn’t true for all Ontarians. How can you manage your clients’ expectations?
Suggested messaging includes:

  • Not everyone is guaranteed to see a 5% discount.
  • Despite what’s been said in the media, the winter tire discount ranges from 2% – 5%; this percentage depends on the company you’re insured by.
  • The winter tire discount was added to incent drivers to install winter tires and improve road safety in winter months; we look forward to a winter with reduced collisions, both in frequency and severity.

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J D Smith Insurance



Committed to Peace of Mind Insurance

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RIBO JD Smith & Associates Insurance Brokers Inc.
105 West Beaver Creek Rd.
Richmond Hill, ON, L4B 1C6
Tel: 905-764-7868
Fax: 905-764-9618
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