Accounting for Law
Personal Injury

Insurance rates continue to climb as benefits go down

Ontario drivers are paying more for auto insurance but getting fewer benefits, despite previous promises from the provincial government to reduce premiums by 15 per cent, says Toronto personal injury lawyer David Derfel.

“It was a bait and switch,” says Derfel, founder and principal of Derfel Injury Law LLP.

“If someone were to do a side-by-side comparison of what was available to Ontarians in 2010 versus now, they would be shocked,” he tells AdvocateDaily.com.

Ontario drivers pay 55 per cent more for auto insurance than the average price in all other provinces and territories in Canada, despite having one of the lowest levels of accidents and fatalities, according to The Canadian Press.

In 2013, the provincial government promised to reduce premiums by 15 per cent by 2015, but as that deadline came and went without the promised changes, not only have rates continued to rise but the benefits and third-party claims that were available were reduced significantly, Derfel says.

For instance, the deductible for pain and suffering has increased, and prejudgment interest has been cut by 80 per cent, Derfel says.

Those who sustained the most catastrophic injuries used to receive up to $1 million in medical benefits and up to $1 million in attendant care. But to combat fraud, insurers lobbied the government to cut those benefits in half, Derfel says. 

Taxpayers will end up footing the bill when the victim has to rely on social services instead, he adds.

“How are you combatting fraud and how are you eliminating small claims by cutting in half the benefits for the people who are the most injured and the most vulnerable?” he wonders.

Meanwhile, average insurance rates rose by another 0.76 per cent in the second quarter of 2017, according to approved rates posted by the Financial Services Commission of Ontario.

Between the Ontario Insurance Act, a recent round of changes to no-fault benefits, and legislation to change the threshold, Ontario’s insurance system has become overly complicated, Derfel says.

The average person is unaware of how these changes affect them since they don’t delve below the surface — often signing up for auto insurance just because they need it to drive a car legally, Derfel says.

But it’s the average person who’s going to suffer most if they get into an accident — the individual who can’t afford their medical treatment, can’t go back to work, and can’t afford to pay an extra $100 or $200 in car insurance, he says.

That’s why Derfel recommends getting immediate legal advice if you've been denied a claim.

“It’s hard to have a fair and even discussion about something when the insurer on the phone knows everything about what they can and can’t do and the claimant knows nothing. They’re effectively powerless,” Derfel says.

Ontario drivers no longer have the right to sue their insurance company for denial of no-fault benefits, says Derfel, and there's little that can be done to hold an insurer accountable if a person has been mistreated. 

The new Licence Appeal Tribunal (LAT) process is nearly impossible for a layperson to navigate, he adds. 

Derfel recommends that, on top of staying as educated as possible about insurance, people raise the issue with their MPPs.

“It seems as though the system exists to protect the insurance companies instead of Ontario drivers and their families,” Derfel says.

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