• Ontario Auto Insurance is Changing
• Customize Your Auto Insurance

The provincial government, a few years ago, passed the Fighting Fraud and Reducing Automobile Insurance Rates Act to fight fraud and abuse within the system.  Measures were put in place not only to combat fraud, but to provide greater choice for consumers.

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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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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