Tools & Resources - McCuaig Insurance

We have assembled a number of insurance-related resources for the use of our clients. For additional information or clarification on any of the topics covered, please speak with a member of our broker team. Our knowledgeable staff will be happy to assist with any inquiries you may have.

Automobile Reform

As part of the 5-year auto insurance review, the Ontario Government has issued a number of automobile insurance reforms that will become effective on September 1, 2010. We wish to draw your attention to the new Statutory Accident Benefits Schedule - Effective September 1, 2010 (new SABS) and amendments to the Unfair or Deceptive Acts or Practices Regulation aimed at ensuring that automobile insurers do not use credit information for specific automobile insurance purposes.

Ontario Regulation 34/10 (New SABS)
The new SABS includes the following changes:
• Capping medical/rehabilitation and assessment/examination expenses for minor injuries to $3,500.
• Replacing the existing Pre-Approved Framework Guideline for Grade I and II Whiplash Associated Disorders with a new Minor Injury Guideline for accidents occurring on or after September 1, 2010.
• Providing standard medical and rehabilitation coverage for non-catastrophic claims of $50,000 (reduced from $100,000), with optional coverage of $100,000 or $1,100,000.
• Providing standard attendant care coverage for non-catastrophic claims of $36,000 (reduced from $72,000), with optional coverage of $72,000 or $1,072,000.
• Providing standard caregiver, housekeeping and home maintenance coverage for catastrophic claims and optional coverage for non-catastrophic claims.
• Capping each assessment to $2,000 - this applies for all assessments, whether they are requested by the claimant or insurer.
• Providing payment for in-home assessments only to claimants who have sustained more than a minor injury.
• Eliminating rebuttal examinations and future care reports.
• Providing income replacement coverage to $400 per week based on 70% of gross income and optional coverage of up to $1,000.
• Providing $2,500 for accounting reports to support income replacement benefits claims.
• Merging treatment plans and applications for approval of assessments or examinations into one process.
• Providing adjusters with discretion in the use of insurer examinations.
• Creating a definition for "incurred expense".
• Simplifying and consolidating the rules that govern claims processing.
• Eliminating a number of approved forms.

How The Reforms May Affect Your Auto Policy
The new standard Ontario automobile policy, to be effective September 1, 2010, includes several significant changes from the current standard policy including provisions that will
result in lower coverage for you.

Statutory Accident Benefits (SABS)
• "Minor Injury" Limits
A new 'minor injury' limit for medical and rehabilitation expenses will take effect on September 1. Claimants meeting the definition will be entitled to up to $3,500 for anyone accident. Higher limits may be available to claimants with pre-existing conditions where a claimant's doctor is able to present 'compelling evidence' regarding the need for higher level treatment. The Minor Injury Guideline, once finalized, will be distributed widely and set the process for accessing treatment without insurer prior approval.
• Income Replacement Benefit
The income replacement formula is currently based on 80% of a claimant's net weekly income up to a maximum of $400 per week. This will change to 70% of their gross weekly income up to a maximum of $400. A seven day waiting period remains in effect.
Clients will still have the option to increase the weekly maximum limit to $600, $800 or $1,000, the same as they do now, but payment will be based on 70% of gross weekly income.
• Medical and Rehabilitation Benefit
The current medical and rehabilitation benefit is $100,000 for non-catastrophic impairments and $1,000,000 for catastrophic. The limits exclude assessment costs.
After September 1, 2010, the standard benefit will be $50,000 for non-catastrophic impairments (a reduction of 50%) and $1,000,000 for catastrophic. These new limits
include assessment costs, which will be capped at $2,000 per assessment.
A buy-back option will be available to bring coverage back to pre-September 1 levels ($100,000 for non-catastrophic impairments and $1,000,000 for catastrophic). An
enhanced option will also be available to increase coverage to $1,100,000 for noncatastrophic impairments, $2,000,000 for catastrophic impairments.

Catastrophic impairments include:
• Paraplegia or quadriplegia
• The total and permanent loss (or loss of use) of an arm or leg
• Total loss of vision in both eyes
• A brain impairment that results in a score of 9 or less on the Glasgow Coma Scale
• A brain impairment that results in a score of 2 or 3 on the Glasgow Outcome Scale
• Impairment of 55% or more of the whole person.
This represents a significant change. It is imperative that you are aware of the potential impact on your coverage, as well as what options exist to increase coverage, in appropriate situations.
• Attendant Care Benefit
The current attendant care benefit is $3,000 per month to a maximum of $72,000 over 2 years for non-catastrophic impairments. During the first two years following their
accident, a claimant may apply to be classified as catastrophic. The benefit for catastrophic impairments is $6,000 per month to a maximum of $1,000,000.
After September 1, 2010, the standard benefit will still be $3,000 per month but only to a maximum of $36,000 over 2 years for non-catastrophic impairments. The two
year period for applying for re-classification will still be in place, so a gap of up to one year could occur from the time the non-catastrophic attendant care benefit runs
out and when the impairment is re-classified. The benefit for catastrophic impairments remains at $6,000 per month to a maximum of $1,000,000. Note: minor injury claimants do not qualify for this benefit.
Clients will be able to 'buy back' attendant care coverage to the prior $72,000 limit.
An enhanced option will also be available to increase coverage to $1,072,000 for noncatastrophic
impairments, $2,000,000 for catastrophic impairments.
• Caregiver Benefit
The changes to the caregiver benefit are significant. The current SABS provides $250 per week plus $50 for each additional dependant, regardless of the impairment. After
September 1, 2010, the amount of the benefit remains the same; however, it is ONLY available where the claimant suffers a catastrophic impairment.
A new buy-back option will be available for policyholders providing $250 per week plus $50 for each additional dependent for non-catastrophic impairments.
• Housekeeping and Home Maintenance Expenses
The changes to this benefit are also significant. The current benefit provides $100 per week for up to 2 years for non-catastrophic impairments and with no time limit for
catastrophic impairments. After September 1, 2010, the standard benefit will only be available in instances of catastrophic impairment.
A new buy back option will be available providing $100 per week for up to 2 years for non- catastrophic impairments.
• Coverage Bundle Options
It may be possible to bundle some coverage options-check with your insurers for availability.
• Dependant Care Benefit
An optional dependant care benefit is currently available to clients, which provides $75 per week for the first dependant, plus $25 per week for each additional dependant. This benefit becomes a standalone option after September 1 and will no longer be bundled with the caregiver benefit.
• Non Earner Benefit
No changes have been made to the non-earner benefit, which remains $185 per week.
After 2 years the benefit is $320 per week for claimants that were students at the time of their accident and have reached 16 years of age. The waiting period remains at 26
weeks.
• Death and Funeral Benefits
There will be no change for death and funeral benefits under the new SABS. They will remain at $25,000 to a spouse, $10,000 to each dependant and $6,000 for funeral
expenses. An enhanced optional benefit would increase these amounts to $50,000, $20,000 and $8,000 respectively.
• Indexation Benefit
A current optional indexation benefit will continue to be available to consumers, linking income replacement benefits, non-earner benefits, attendant care benefits or medical and rehabilitation benefits to the Canadian Consumer Price Index.
• Tort Deductible
After September 1, 2010, your client will have the option to reduce the deductible associated with court awarded compensation for pain and suffering from $30,000 to
$20,000, (or from $15,000 to $10,000 for Family Law Act awards). This endorsement will provide a buy down on the deductible currently imposed by the Insurance Act on any settlements awarded for pain and suffering following an automobile accident.

Other Key Changes
• Accidents where your client is 25 per cent or less at-fault will no longer affect their premium.
• The deductible that is applied to court awards for fatal accidents has been eliminated.
• A new requirement that insurance companies send out benefit statements to their claimants, advising how much has been paid to date, and the additional amounts
remaining for medical, rehabilitation and attendant care benefits.
• If an auto has been damaged or written off after an accident and your client does not agree with the value offered or the degree of fault for the accident, your client
can choose the appraisal process outlined in the Ontario Auto Policy to settle the dispute, and the insurer must agree to participate.
• Coverage is extended to rented autos with a Gross Vehicle Weight Rating (GVWR) of more than 4,500 kilograms, if for personal use and rented for up to 7 days.
• Prohibiting use of credit scores in giving quotations for your auto insurance rates.

Transition to the New SABS
Where a policy is still in effect on September 1st, 2010,
• All 'buy-back' options, such as those noted above, will be read into auto policies until the end of their current term.
• All options previously purchased will continue automatically after September 1st.
Policies effective before September 1 will have the old limits honoured until post-September 1st renewal. Claims occurring prior to September 1st will have the old SABS limits and procedures apply. For claims occurring after September 1st, the current limits remain in force, however, the new SABS procedures will apply.
Clients renewing on or after September 1st will be at the new standard.

For more information please contact our office at

The Insurance Bureau of Canada, representing 90% of the property and casualty (P&C) insurance market in Canada, is also a valuable resource for insurer-related information.