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Knowing recovery costs key to being financially prepared after serious injury

Traumatic injury is a huge financial burden to the country and the havoc it can cause to those financially unprepared can be just as debilitating, says Easy Legal Finance Inc. president and CEO Larry Herscu.

Costs associated with personal injuries hit $26.8 billion in 2010 in Canada — the most recent figure available — according to a 2015 report by Parachute Canada. The report, which notes injuries also killed 15,866 the same year, predicts by 2035 it will cost Canadians $75 billion and claim 26,390 lives annually.

Parachute Canada says preventable injuries are the biggest killer of people aged 44 and under in Canada.

The organization's research found vehicle collisions and falls are responsible for more than 156,600 of the 231,596 injuries reported in 2010, while the Insurance Bureau of Canada notes auto insurers paid more than $151.5 million in claims in Ontario in 2016.

"What this research shows is there are probably more accidents than most people are aware of," Herscu tells AdvocateDaily.com. "More people die and are injured than they expect, and the costs, either public or private health care, are way beyond everybody's resources.

"According to the statistics, there were 3.5 million emergency room visits in 2010 and more than 60,000 disabilities," Herscu says. "Twenty-three people die every day because of mishaps.

"It's staggering just to think about it." 

Herscu says people disregard the possibility they may be involved in an accident, or they think it will be minor. He says they can augment their personal financial resources only if they understand the breadth of the problem.

Easy Legal Finance Inc. offers financial support to people who have been hurt in an accident to help them pay bills while their lawyer fights for a settlement.

Injuries could happen to anyone at any time, and people need a plan to ensure their financial stability during their recovery or if they've become permanently disabled, Herscu says.

"I don't think people understand how big an issue this is," he says. "They don't think it's going to happen to them, but they don't realize how many people this happens to. You need a plan because the numbers are big and growing."

Herscu says adequate auto insurance coverage is a key element to financial security. People should consider it as an investment rather than a necessary cost, he says. Study all the options in the policies and make choices based on the "what ifs" rather than the costs, he adds. 

Herscu says insurance offers protection from what the statistics show is a growing trend that could be catastrophic to families.

"When somebody gets into an accident, they find it's expensive and because most people don't plan for it, they find themselves in a situation where they can't cope with the injuries and the costs."

How much time and money it will take to heal depends on the severity of the injury, Herscu says. For example, the cost of caring for someone who suffered long-term brain injuries could add up to about $1.9 million over a lifetime, according to the Toronto Acquired Brain Injury Network.

"The average costs of medical care becomes quite expensive when you discuss severity," he says. "You're talking several hundreds of thousands to millions of dollars that are required."

Recent changes to vehicle insurance "in Ontario, in particular, really require people to take action, go back and revisit your insurance agent to understand what coverage you have and determine if there's excess coverage in on the accident benefits side," he says.

"I don't think anyone has enough car insurance, particularly as since the limits in the benefits package changed last year and people haven't taken the time to understand that reduction, and what the costs of it are," Herscu says.

"What do you have and is it considered adequate?" he asks. "If people understood the costs of recovery, particularly if it becomes catastrophic, it would help them determine whether their insurance coverage is adequate."

 

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