Auto insurance is changing effective June 1, 2016

A new provincial measure is attempting to avoid uninsured drivers on the roads. Driving without insurance is illegal; a minimum $5,000 fine on conviction is the penalty. Roughly 2,100 uninsured vehicles are involved in collisions on Ontario roads every year. Some of those collisions are fatal. All are costly.

Effective June 1, 2016 the mandatory accident benefits coverage included in every auto insurance policy in Ontario is going through some changes. The reason behind it is to lower the cost of insurance for the policy holder and consequently allow more drivers to purchase auto insurance.

Financial Services Commission of Ontario (FSCO) recommends that you do four things to make sure you understand how these changes will impact you:

·   Read the "Important Changes to your Policy!" document that came in your renewal package. See if the changes reduce or eliminate something that was important to you, and if so what you can do about it.

·   Compare the new policy to your current policy to see what changes have been made. Remember, if you have benefits from your employer or another policy, you may already have some level of coverage for some or all of the changes made. You should consider these benefits as you review your coverage options.

·   Understand your policy. Call your insurance representative and ask questions, or do some additional reading, to make sure you understand auto insurance or what a coverage means. Make sure you know what options are available to increase or purchase other benefits, or to reduce premiums by increasing deductibles or taking advantage of discounts.

·   Shop around. There are many insurance companies competing on price and service in Ontario, and you should make sure that you compare at least three quotes for the same coverages before making a decision. You may purchase a policy through a licensed insurance broker, insurance agent or from a direct writer. There are many ways to save on auto insurance.

Most significant changes:

Benefit	Current Policy	New Policy	You can choose
Medical and Rehabilitation for non-catastrophic injuries	$50,000	These benefits have been combined and reduced to $65,000total ​	Increase the benefit to $130,000 total ​
Attendant Care for non-catastrophic injuries	$36,000
Medical and Rehabilitation for catastrophic injuries	$1,000,000	These benefits have been combined and reduced to $1,000,000 total ​	An additional $1,000,000 for a total of $2,000,000 for catastrophic injuries ​
Attendant Care for catastrophic injuries	$1,000,000
Medical, Rehabilitation and Attendant Care, all injuries	​Not applicable	Not applicable	Increase the combined non-catastrophic benefit to $1,000,000 and the combined catastrophic benefit total to$2,000,000

Other Optional accident benefits (OAB)

Benefit/Coverage	Current Policy	New Policy	You can choose
Income Replacement benefit	70 per cent of gross income up to $400 per week.	No change	To increase the weekly limit to $600, $800 or $1,000 per week.
Caregiver benefit	Available only for catastrophic injuries: Up to $250 per week for the first dependant plus $50 for each additional dependant.	No change	To make the same amounts available in current policy for catastrophic injuries available for all injuries.
Housekeeping and Home Maintenance expenses	Available only for catastrophic injuries: Up to $100 per week.	No change	To make the same amounts available in current policy for catastrophic injuries available for all injuries.
Death and Funeral benefits	$25,000 lump sum to an eligible spouse; $10,000 lump sum to each dependant; maximum $6,000 funeral benefits.	No change	$50,000 lump sum to an eligible spouse; $20,000 lump sum to each dependant; maximum $8,000 funeral benefits.
Dependant Care benefit	Not provided	Not provided	To purchase this benefit and add up to $75 per week for the first dependant and $25 per week for each additional dependant to a maximum of $150 per week.
Indexation benefit	Not provided	Not provided	To add an annual adjustment for inflation for many benefits according to the Consumer Price Index for Canada to your policy.
Third Party Liability	$200,000 minimum for claims as a result of lawsuits against you.	No change	Options exist to increase the minimum amount.
Tort Deductible	$36,905.40 deductible for court awarded compensation for pain and suffering (Jan 1-Dec 31, 2016).	No change	Reduce deductible by $10,000 regardless of annual indexation percentage increases.

Click here to access the full article and view more detailed information about the accident benefit changes in coverage June 2016.