April 15, 2009
By Darren Rodrigues
National programs manager

If you’re like most people in Ontario, you are probably not familiar with the accident benefit entitlements under your auto insurance policy. You likely haven’t read your insurance policy recently, and maybe not at all.

When people think of auto insurance, it usually brings to mind physical damage to their car, or liability insurance in case they are sued. What many don’t immediately consider are the benefits available if they are injured in an accident.

Every auto insurance policy in Ontario has mandatory accident benefits coverage set out in the Statutory Accident Benefits Schedule (also known as SABS). Coverage pays medical and even funeral expenses for you, members of your family and passengers in the event of an auto accident, regardless of who caused the accident. Mandatory first party accident benefits provide injured parties with a basic level of treatment and care, also regardless of fault. The operative word here is basic.

 It is important to note that you may also purchase optional benefits to fit your specific situation and income needs. Many people buy additional protection beyond the mandatory coverage, including extra income replacement, protection against additional medical and rehabilitation costs, larger death benefits and inflation coverage among others.

Here is what is included in a standard policy, with optional benefits noted in italics:  
  • Medical/rehabilitation and attendant care benefits provide up to $100,000 over a period of 10 years for medical/rehabilitation expenses. If your injury is serious enough to be termed catastrophic, under the SABS, this benefit increases to $1 million over a lifetime. The standard maximum for attendant care is $72,000. You may buy optional benefits, which will cover up to $1,172,000 in additional medical, rehabilitation and attendant care expenses, and up to $3 million for catastrophic injuries.  
  • Income replacement benefits are available after a seven-day waiting period. You can receive up to 80 per cent of your net weekly income. This benefit is normally capped at $400 per week, but there is an option to increase this amount in your policy up to $1,000 per week.
  • Funeral and death benefits are paid if an insured dies as a result of an accident. The insurer may be required to pay funeral expenses to a maximum of $6,000 and a sum of $25,000 to a spouse or dependants. If the insured was a dependant, there is a $10,000 benefit for the person the insured was dependant upon. If you buy optional benefits, you can increase these amounts to $50,000 to your eligible spouse, $20,000 for each dependant and $8,000 for funeral expenses.
  • Caregiver benefits are paid if you need to hire someone to care for your dependants. The standard maximum amount for caregiver benefits is $250 per week for one dependant, plus $50 per week for each additional dependant. If you buy optional benefits, the coverage increases to $325 per week for one dependant, plus $75 per week for each additional dependant.   

For many, the standard benefits available are not enough if they are injured in an accident. Take income replacement, for example: If you operate your own business and/or are the sole provider for a family, the $400 per week is clearly insufficient to meet expense needs. The income replacement benefit is often increased for self-employed professionals and trade contractors.  

Similarly, for medical/rehab benefits the maximum amounts of $100,000 for less serious injuries or $1 million for catastrophic impairments sound like a lot of money. But you would be surprised how quickly health care costs can eat away at these sums. For no-fault benefits, very specific criteria are set out to help determine whether a person is catastrophically impaired. This typically means that individual impairments must add up to 55 per cent of ‘whole person impairment’ as interpreted through the American Medical Association’s Guide to the Evaluation of Permanent Impairment.  

The bottom line is that you could have a serious injury that is not deemed a catastrophic impairment, but still requires extensive medical care. That means accident benefits are capped at $100,000. Given the expenses associated with modern health care and rehabilitation, some consumers choose to increase this benefit.    

You have many choices when buying auto insurance. All of these options, and your deductibles, will have an effect on the cost of your policy. Don’t let a lack of information keep you from ensuring that you have the coverage you need. If you have questions, give us a call at Sinclair Cockburn Financial Group. We can discuss your options and give you the information you need to make the right choice.  
Darren Rodrigues of Sinclair Cockburn can be reached by phone at 416-494-9883, or by e-mail at darren.rodrigues@scfg.ca.