Personal Injury

Government’s proposed insurance changes a start: Derfel

By Paul Russell, Contributor

The Ontario government’s plan to reinstate a $2-million default benefit limit for catastrophic injuries is welcome news, says Toronto personal injury lawyer David Derfel.

“This proposed changes entirely make sense,” says Derfel, founder and principal of Derfel Injury Lawyers.

The previous Ontario government cut the catastrophic claims benefits in half, making it difficult to cover the costs of long-term care, Derfel tells

“Anyone who has a grandparent or parent in a long-term care facility knows that these places can cost up to $6,000 a month.”

If a child is hurt in a car accident and requires decades of care, $1 million of rehabilitation funding will disappear in less than 14 years if the family is paying $6,000 a month for care, he says.

According to a Postmedia story, the reinstatement of the default limit is part of an insurance reform package called “Putting Drivers First,” aimed at fixing a “broken system.”

One component of that package is to do away with the pink slips that Ontario drivers are required to carry in their cars, replacing them with electronic forms of insurance verification, says the article.

“Many law offices and businesses are paperless, so people will accept that as being appropriate,” Derfel says.

He notes that people are accustomed to electronic boarding passes and having credit cards on their phones.

“It’s not the pink slip that’s important, it’s the evidence of having auto insurance that really matters,” he says.

Derfel supports the idea of giving drivers access to more types of coverage and plans, based on their driving needs, though he doubts the proposed reforms will reduce rates for most drivers.

“The last government promised a 15 per cent reduction in rates, but all they did was to reduce benefits, which helped insurers, but the rates never went down,” he says.

Derfel is also skeptical about the proposal to give drivers a policy discount if they use health providers or vehicle repair businesses endorsed by their insurance company.

“People should have affordable auto insurance but not have to give up their choice of health-care provider to do so," he says. "An insurance company should not dictate who provides rehabilitation. Your health, your choice."

Derfel says the package of auto insurance reforms should have included changes to the incurred expense provision in Ontario’s Insurance Act.

He explains that, under the current system, if an insurance company denies attendant care at the outset of a claim, a Licence Appeal Tribunal may rule that the care should have been provided. However, years may pass between that hearing and the accident, with the victim not receiving any money during that time.

“The government should have also eliminated the incurred expense rule for attendant care benefits," Derfel says. "Currently, there really is no real consequence to an insurer that unreasonably denies a benefit. It can starve out its own client."

He says the focus of any auto insurance reform should be the people that rely on insurance benefits after a car accident.

"Just because an insurance company doesn't pay a benefit, doesn't mean it's not needed," says Derfel.

He also says cuts to insurance can become "a burden to taxpayers."

“Every dollar of benefits not covered by an auto insurance company can get passed on to the public through lost time at work, use of government assistance programs, and increased doctor and hospital visits,” he says.

“Every dollar cut from an insurance policy could end up being a dollar taken from the public.”

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