Ontario’s insurance companies must implement sweeping changes on June 1 to comply with the provincial government’s mandate to lower auto premiums by 15% – but clients may be less than pleased with the resulting reduction to their accident benefits.
“The standard auto insurance policy you receive from your insurer or broker will have the new lower benefits – unless you act quickly and contact your insurance representative to purchase optional coverage,” states the Financial Services Commission of Ontario’s website.
Changes to accident benefits include:
- Combining the benefit for medical and rehabilitation (previously $50,000) with the benefit for attendant care (previously $36,000) for non-catastrophic injuries to a total of $65,000. Clients can opt into additional coverage of $130,000 for both.
- Combining the benefit for medical and rehabilitation (previously $1,000,000) with the benefit for attendant care (previously $1,000,000) for catastrophic injuries to a total of $1,000,000. Clients can opt into adding an additional $1,000,000 or a total of $2,000,000 for both.
- Clients can choose to increase their non-catastrophic benefits for all injuries to $1,000,000, and their catastrophic benefits for all injuries to $2,000,000
Messaging around the changes may leave clients feeling they’re losing out on much-needed coverage – a misconception brokers should take care to explain, says one Toronto-based insurance professional.
“What customers always seem to hate when these reforms come out is the delay in the cost savings; the government has stripped out product, but that won’t affect the savings or profits of the insurance companies for a number of years,” says Adam Mitchell, President of Mitchell and Whale Insurance
. “It’s a lot of work for brokers, there’s no doubt about that - it requires a lot of communication with clients. But I think, in general, it’s good for the public… I don’t think Ontario is competitive, I think it’s an overly inflated product with a lot of features that everyone is required to buy.”
He argues that the reforms offer a more customizable product to budget-conscious clients, many of whom may have been overly insured under the old structure.
“Not everybody needs to buy a Mercedes. Sometimes, Hyundai will serve the population just fine, somebody can do without a few of the options. So in that case, people can choose the amount of risk they want to take on and pay the appropriate for that.”