Friday, July 30, 2010

Prepare for BIG changes to auto ins Sept 1, 2010

Crashed Toyota MatrixImage via Wikipedia
  Thanks to Justine Lear Hamilton, SLP, of Lear Communication for this important document which she has generously shared for widespread publication. (It has been slightly modified for the purposes of this post).


You may be wondering I would be writing about changes to your car insurance!

Well, it's because in my Speech-Language Pathology practice, I treat a number of people who have sustained serious brain injuries in car accidents.  Some of these clients were drivers, some were passengers, some were pedestrians, some were cyclists.  But all of them were well functioning individuals until a completely unpredictable accident changed their lives forever.

Brain injuries are not like broken legs.  Our brains control every single physical and mental function we perform.  Trying to “fix” a damaged brain can take years of therapy.

This year, the Ontario government announced sweeping changes to the auto insurance system.  Our government is concerned that insurers have not been profitable enough, so they decided to dramatically cut benefits paid to rehabilitate people who are seriously injured in car accidents in order to increase insurer profits.  These cuts take effect on September 1, 2010.

Currently, if you are seriously injured, your auto insurance policy covers assessments and diagnostics plus up to $100,000 in therapy/rehabilitation funding over 10 years.  This coverage is important because there are next to no rehabilitation services available through hospitals and home care anymore.

Under the new policy, your assessment and treatment costs together cannot exceed $50,000 over 10 years.  This represents a 70% cut to your benefits.

While $50,000 may sound like a lot of money, that is just $5,000-10,000 per year, depending on how many years of therapy you need.  If you are bedridden, unable to work or go to school, unable to look after your children, etc., you may need the services of a speech-language pathologist, occupational therapist, physiotherapist, chiropractor, psychologist, etc.  Having $600/month to fund your entire rehabilitation needs is grossly insufficient.

The government is, however, giving you an option to “buy up”; that is, to purchase a higher level of coverage.  You can choose to purchase $100,000 or $1,000,000 in rehabilitation benefits.  It is my strong recommendation that you purchase $1,000,000 in coverage.  I have been purchasing this level of coverage for several years and it has just cost me an additional $70-100 per year in premiums.  I consider this a pittance in order to obtain crucial rehabilitation services should I ever be injured in an accident.

Right now, when you buy your policy, there is a premium for “liability” and a premium for “accident benefits”:

·   The “liability” amount is the amount you are purchasing to pay for someone else’s rehabilitation if they sue you because of an accident you were involved in.
·   The “accident benefits” is the amount you are purchasing to pay for your own rehabilitation.

Most insurance brokers make sure you purchase at least $1,000,000 in liability to cover someone else’s rehabilitation.  However, many accidents do not meet the criteria for a lawsuit, so you can not count on being able to sue someone for your rehabilitation funds.  And even if you can sue, you will have to wait years to get that funding, all the while being unable to perform your usual activities of daily living.

If you are willing to pay higher premiums to cover someone else’s rehabilitation, shouldn’t you also be willing to pay more to cover your own?

Please feel free to contact me if you have any questions!


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