Will you have enough Accident Benefit Coverage if you’re seriously Injured?

Under Ontario auto insurance policies, insured persons are covered for injury losses arising from a motor vehicle accident.  Unfortunately, many persons who sustained a serious or catastrophic injury have discovered too late that their basic coverage isn’t sufficient to fully cover them for losses such as medical and rehabilitation expenses.

Under your basic coverage, the amount and type of benefits you may receive in the event of an accident depends on the severity of your injury. 

The medical and rehabilitation benefit includes such treatments as physiotherapy, psychiatric or psychological care, chiropractic treatments and exercise rehabilitation.  A person with a minor injury may be paid up to $3500 in medical and rehabilitation benefits for up to 5 years; persons with a more serious but non-catastrophic injury may receive up to $65,000 for medical, rehabilitation and attendant care benefits for up to 5 years; while someone who sustains a catastrophic injury is eligible for up to $1 Million in (lifetime) medical, rehabilitation and attendant care benefits. (Attendant care provides a seriously injured or disabled person with services such as cleaning, cooking and dressing, which they can no longer do independently.)

Persons who are unable to fully return to work due to their injury are eligible to receive an income replacement benefit.  The basic benefit will pay up to a maximum of $400 weekly or 70 percent of a person’s gross income, whichever is the lesser amount.  For eligible claimants, this benefit may be paid to the age of 65, at which point it will be significantly reduced or terminate.

In the case of a fatal automobile accident, the spouse of the insured person may receive a $25,000 lump sum death benefit payment, and dependents may each receive a lump sum of $10,000.  Basic coverage will also pay up to $6000 in funeral expenses. 

A person with a catastrophic injury may be entitled to a caregiver benefit if their injury prevents them from being able to take care of dependents, as they did before their injury.  The caregiver benefits pays $250 weekly for the first dependent and $50 weekly for each additional dependent, up to a period of two years. 

Catastrophically injured persons are also entitled to a lifetime housekeeping and home maintenance benefit of up to $100 weekly.

Why you may need additional insurance coverage

Medical and rehabilitation expenses often exceed the amount provided under a basic automobile policy, particularly in the case of a catastrophic injury.   For this reason, the purchase of the optional medical and rehabilitation benefit is most recommended. 

In the event of a non-catastrophic injury, Option 1 will increase your maximum benefits for medical, rehabilitation and attendant care expenses to $130,000 for 5 years, while Option 2 will increase your maximum benefits to $1 Million for life.  You can also purchase an option which will increase your maximum benefit to $2 Million for life, in the event of a catastrophic injury.   Further, you can purchase an optional benefit for medical, rehabilitation and attendant care expenses for all types of injury and this will increase your benefit for non-catastrophic injury to a maximum of $1 Million and your catastrophic benefit to a $2 Million maximum.  If you have both the non-catastrophic and catastrophic injury optional benefits, your maximum benefit in the event of a catastrophic injury will be $3 Million.

If you are not covered under another income replacement benefit plan (for example, under a long-term disability insurance plan) or rely on substantially more than $400 weekly to pay the bills, it’s a good idea to purchase optional income replacement insurance.  There are three options of income replacement insurance available, paying $600, $800 or $1000 weekly, depending which option you buy.

An optional caregiver benefit is available if you wish to be covered in the event of a minor or non-catastrophic injury.  This optional benefit is suggested for primary caregivers who have dependents and are not employed.   Be aware that you cannot receive both the caregiver benefit and income replacement benefit at the same time.   

Similar to the caregiver benefit, a person can purchase an optional housekeeping and home maintenance benefit which provides coverage for up to 2 years in the event of a minor or non-catastrophic injury. (This coverage is available under the basic policy for only catastrophic injuries).  

There are additional optional benefits available for purchase under your accident benefits policy for: death and funeral expenses, dependent care, and an indexation benefit to adjust the income replacement benefit for inflation.  Depending on your personal circumstances, one or more of these benefits may be a prudent purchase.

Accident Victim sues State Farm for failing to recommend Optional Coverage

A driver was seriously injured when his motorcycle was struck by a car.  The accident victim, Mr. Roszczka, was self-employed and earned a significant income prior to the accident and his serious physical and psychological injuries prevented him from returning fully to his job.   Mr. Roszczka filed several claims, including against the defendant driver for causing his injury and also against his State Farm insurance broker (under the uninsured/underinsured portion of the auto insurance policy and personal liability umbrella policy, as the claim exceeded the defendant driver’s liability policy limits).

Mr. Roszczka’s injuries include many broken bones for which he underwent multiple surgeries.  He also sustained a brain injury, which resulted in cognitive difficulties and personality changes. 

In the action against his insurance broker, Mr. Roszczka is claiming $10 million in damages. The claim is alleging breach of contract and professional negligence, which caused Mr. Roszczka to be underinsured for the losses he suffered due to his injuries.  Mr. Roszczka stated that his insurance broker did not recommend purchasing additional accident benefits or private insurance to provide income replacement and to cover other losses not provided by the basic automobile insurance policy.  Mr. Roszczka also alleged that his broker did not set up adequate under-insured limits on the OPCF 44R Family Protection Endorsement (where the limit is $2.3 Million).

Mr. Roszczka is one of many Ontario accident victims whose injury losses far exceeded their insurance coverage.  The reality is that severe and catastrophic injuries can easily result in substantial costs, often for the person’s lifetime, and many of these expenses are not fully covered (if at all) by OHIP.   Potential expenses include mobility devices, modifications to one’s car and/or residence, physiotherapy and psychological therapy, specialized services and in serious cases, 24-hour attendant care.  For this reason, it’s prudent to review your accident benefits and determine whether you would be seriously disadvantaged if you are injured and don’t have access to a needed benefit.  It may be too late once the accident has already occurred.

Sources:

See the Government of Ontario website for more information on statutory accident benefits: www.fsco.gov.on.ca/en/auto/brochures/pages/brochure_autoins.aspx

Roszczka v. Tiwari (2021)