Ontario auto insurance: How much worse can things get for victims?
Changes in 2010 created windfall profits for insurers by slashing coverage for the vast majority.
We need to restore fairness and impose a moratorium on further reductions in coverage!
In September 2010, the Ontario government introduced sweeping changes to auto insurance in response to pressure from the insurance industry to contain injury costs despite the industry’s long-standing failure to address systemic fraud in the system.
The MIG: Minor Injury Guideline for victims
The main feature of the so-called reforms was the MIG – the Minor Injury Guideline. What did it mean? Coverage for the vast majority of policyholders was slashed from $100,000 for medical and rehabilitation treatment to the paltry level of $3,500 maximum for medical and rehab needs following an accident. The MIG currently captures up to 75 per cent of all accident victims in Ontario, often without regard for the seriousness of the injuries involved. OTLA members report that many clients in the MIG typically exhaust their maximum benefit of $3,500 very quickly, leaving them without access to needed treatment. Clients are often forced in the Minor Injury category despite having injuries that could not reasonably be considered as “minor” e.g. serious fractures and brain injuries.
The MIG: Major Income Generator for insurance companies
It’s really no surprise what happens when premiums are increased and insurance payments are dramatically reduced for most injured accidents victims. In fact, the “good news” for insurance companies started to become apparent almost immediately. Here’s what one insurance CEO quipped, perhaps a bit too candidly, mere months after the changes:
“We are starting to see the benefits of the 2010 auto reforms in Ontario, which is combining with our recent focus on proactive broker management and underwriting discipline to generate stronger results.”
The early trend that this CEO was talking about here materialized and, by the end of 2012, total auto insurance claims were down more than 20 per cent or a reduction of $4 billion. The tally for auto insurers was more than $3 billion in profits in the first two years following the 2010 changes. Early indications for 2013 indicate that auto insurance companies in Ontario continue to enjoy strong results to this day. It should come as little surprise to anyone that insurance companies are doing extremely well under this model: then again, you can’t lose when you’re charging more and paying out a lot less.
Ontario, now the worst coverage in the country
As a result of the September 2010 changes, Ontario emerged as the only jurisdiction in the country with a special category of insurance for so-called “minor” injuries. And, significantly, Ontario has the lowest level of compensation for this category of injury. Even the insurance industry’s own data supports this contention with average claims payouts down dramatically from previous levels and more claimants than ever being captured by the MIG.
But how much worse can things get for victims?
Once again, columnist Alan Shanoff has documented the steady slide in coverage over the past few years in Ontario. Read his comments here. He ends his article this way:
“One thing is certain. The current system can’t get much worse for accident victims. Victims need timely, adequate accident benefits even more than they need premium cuts.”
Help make things better for victims!
As a candidate, here’s how you can help ensure that the system doesn’t get any worse for victims:
Demand that your party impose a moratorium on further auto insurance coverage reductions
It’s time for our politicians to stop worrying about how to allow insurance companies to make more money, and start concerning themselves with how to restore fairness in our automobile insurance system.