First Minor Injury Giudeline Case Demonstrates Lack of Coverage in Ontario
The recent case of Scarlett v. Belair, FSCO A12-00107, is important more for what it demonstrates in terms of the state of automobile first party insurance benefits in Ontario at the present time, than as an analysis of the application of the Minor Injury Guideline in the legal context.
They key factors that support this contention are:
1. The amount of time it took Mr. Scarlett to obtain a remedy;
2. The total cost of the process; and
3. The approach of the insurer in adjusting the file.
The intention of the insurance industry in convincing their regulator and the Ontario Government to gut first party benefits in Ontario can be and was only to save money. That is clear. Who pockets the savings is another issue and really cannot be dealt with here.
The insurers must have hoped that some of the savings would be direct – less money paid to each applicant. They must also have hoped that the new process would have created a “C change” in the provision of treatment in the Province by reducing the number of service providers or at least limiting their expectations.
The insurance industry clearly believes, as it seemingly always does, that the claims process is swimming with fraud from the applicant, to the service provider and even to the adjusting level. There are examples of each of these.
Many may recall that Bob Rae’s NDP government felt that by reducing the availability of doctors – by graduating smaller numbers of physicians – they would be able to control health care costs; The thought process being that if we limit the number of doctors, and cap what they can charge, we will limit our exposure to the expense of providing health care. However, that thinking does not in any way fight disease – reduce cancer or coronary artery disease – or assist in providing timely and adequate medical care. The net result has been higher doctor’s salaries per capita and much longer wait times. One really cannot comment here about what it has done, if anything to “quality“ of service.
The problem with this line of thinking is that limiting first party benefits did not prevent Mr. Scarlett from being injured. It limited his ability to seek benefits outside of the OHIP system or out of his own pocket. Since he was not entitled to those services through OHIP, his only hope was to seek first party benefits or an advance from the third party insurer. Since OHIP has a very limited ability to provide the services that Mr. Scarlett needed, and since obtaining and advance payment from third party insurers is exceedingly rare, the net result was that Mr. Scarlett had to avail himself of the Dispute resolution process.
The process, designed nearly 25 years ago, was supposed to provide prompt, efficient and inexpensive remediation. The insurers must have known when they went to FSCO four years ago to gut the system that the FSCO process has become anything but prompt, efficient and inexpensive.
It took Mr. Scarlett over 2.5 years to obtain a remedy. That, in and of itself, is an abomination.
It took Mr. Scarlett over 2.5 years to obtain a very modest remedy (opening the door to somewhat more than $3,500.00 in first party benefits.) That makes two abominations.
My guess is the insurer spent many multiples of the benefit claimed to fight Mr. Scarlett. If that is true that is a third abomination.
If the purpose of first party benefits, which in Ontario are very expensive and mandatory to purchase, is to provide medical relief quickly, the case of Scarlett shows that they do not.
There is a web of deception exposed by the Scarlett case –whether intentional or not. We are told that we have the premier first party benefit system in North America, if not the world. This is to convince us that the very expensive premiums we pay to fund those benefits are justified. What is exposed by the Scarlett case is the question, “Why do we pay hundreds of dollars in premiums to get such trifling benefits that can costs us years and many extra thousands of dollars to obtain?”
We have been told that the regulator promised the insurance industry that the changes made in 2010 would reduce their costs significantly – maybe by 80 or 90%. That is like Bob Rae promising us that if we just eliminate the doctors, our health care costs will be reduced.
What we were not told, or what wasn’t made clear was that by reducing, or in fact virtually eliminating the right to obtain first party benefits in a timely and inexpensive way, we are essentially paying something for nothing. If it was not mandatory, what educated consumer would spend six, seven or eight hundred dollars a year to buy $3,500.00 worth of coverage? This question is laid bare in the Scarlett case.
It should be an embarrassment to the regulator that they have permitted this demonstration to have been made. We permit insurers the right to spend our money to eliminate our right to medical treatment. We then make the consumer, the person who the regulator is protecting, take 2.5 years to fight for minimal benefits. Recall, Scarlett is the first case. How many thousands more Scarlett cases are out there?
In Ontario, we were used to premier benefits unlike many other jurisdictions that make no pretence of this. Scarlett should demonstrate to FSCO and to the Ontario Government that it now regulates a sham. There is no way that it is justifiable that someone need pay so much for a policy of insurance, take so much time and spend so much money attempting to remedy their rights to obtain so little a benefit.
In a dream world, insurance companies hire educated and experienced adjusters who look at a file, listen to all the evidence presented and determine what is needed by the client within the limits of the policy. They do not look for “technical” loopholes to ensure that 80 or 90% of their cases by volume result in minimal or no payouts.
It would be better if the consumer were told that they are buying $3,500.00 worth of coverage (not at the current bloated price but at a truly fair price) and if they want more they have to pay more. Scarlett demonstrates quite clearly that consumers in Ontario are paying a lot for very little.