Ontario has announced upcoming changes to our automobile insurance. In a nutshell, these new changes include lower accident benefit limits in standard insurance policies, new options to increase coverage, new procedures for payment and a mandatory Winter Tire Discount (up to 5%) offered by insurance companies across Ontario. (See the Ontario Auto Insurance Customized PDF Info Graphic for a detailed visual on all the changes and options coming in June 2016.)
These changes are put in place to make auto insurance more affordable while continuing to provide to provide protection to policy holders.
The following is brief overview of the coming changes:
Winter Tire Discount:
- Winter tire discount became effective January , 2016 for all insurers including Facility Association.
- Discounts range from 1-5%.
- Some insurers may only offer this discount at certain times of the year. Call your broker or insurance company to confirm this.
- If you can, please provide photos of winter tires on the vehicle and purchase receipt/installation receipt.
- This discount encourages people to use winter tires. This will reduce the chance of accidents and collisions.
Monthly Payment Finance Charge:
- Effective June 1, 2016, any policy issued or renewed will be eligible for this change. It will reduce the monthly payment charge to 1.3% max on 12 month policy terms.
- Also effective June 1, 2016. The standard deductible will increase to $500 from $300.
- This coverage will on apply to accidents/claims on or after June 1, 2016.
“Insurer may not have to take into consideration an accident when deciding to issue, renew, cancel or in determining premium under the following conditions:
- Cost of damages to each vehicle (including property damage) does not exceed $2,000 and cost of all such damage is paid by the at fault party.
- No personal injuries sustained as a result of an accident.
- No payment is made by any insurer for any damage to the vehicles or property resulting from the accident.
- However an insurer may consider a minor accident if vehicle is involved in more than one at-fault in three years and in each incident the driver of that vehicle was at-fault.” (The Ontario Broker, November/December 2015 issue.)
Effective June 1, 2016, there will be quite a few changes to accident benefits. Some of these changes you can expect to see include:
- There will be a new combined limit for Medical, Rehabilitation and Attendant Care Expense for both catastrophic and non catastrophic injuries.
- There will also be new definition of “catastrophic impairment” that will be consistent with more current up-to-date medical information and knowledge. The new definition in the Ontario’s standard accident benefits schedule is as follows “Includes new and/or updated definitions and criteria for traumatic brain injuries for adults and children, amputations, ambulatory mobility, loss of vision, and mental and behavioural impairments, and introduces a new process for combining physical with mental and behavioural impairments”. (Financial Services Commission of Ontario)(Insurance Institute).
- See the Ontario Auto Insurance Customized PDF Info Graphic for a detailed visual on all the changes and options coming in June 2016.
You may ask yourself why is this important?
Insurance can sometimes have a negative association with us. In other words people would rather use those monthly insurance expenses elsewhere – like an automobile upgrade or for that vacation you have been wanting. The fact of the matter is that we must look at it as a safety net protecting and a critical factor in individual and collective well-being. It is at the point when you, or a friend or loved one is involved in an accident or catastrophe that your outlook changes about insurance. It goes from negative association to that of appreciation. You may ask yourself what would have happened if a policy hadn’t been in place?
The purpose of these new changes is to reflect on what people really need. Look through your policy or call your broker or insurance company and look into what your policy actually covers. The fact of the matter is that some people choose standard packages for the sole reason that their premium would be lower. However standard policies are just that…..standard. They don’t include “benefits like dependant care, which reimburse additional expenses to care for your dependants. While auto insurance products are becoming more affordable for consumers, gaps might exist depending on your lifestyle. The good news is there’s opportunity to fill those gaps by increasing coverage or adding options to cover specific areas of your life. Purchasing appropriate coverage is an investment in your family, your children, your parents….ultimately it’s an investment in your lifestyle. What could be more important?”
Depending on when you read this, make sure and contact your broker to ensure that you have the best coverage possible based on your lifestyle.