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Lee Romanov
Lee Romanov

It's Covered

The truth about insurance caps Add to ...

In the good old days it would sometimes take weeks for reader reaction to newspaper articles to appear as letters to the editors on the op-ed pages. Ah, the joys of snail mail.

However, in today's online era, you post it - and they can roast it. Instantly. That was the case a couple of weeks back when my GlobeDrive.com article entitled " Ontario's insult to injury" was published. By the time the dust settled, 35 readers had taken the time to join the discussion regarding the province of Ontario's move to cap treatment of minor injuries at $3,500.

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But there was one particular comment that caught my eye. It came from a poster by the name of Gridiron. Outraged, Gridiron wrote the following:

"WOW. Globe how do you keep supporting an 'EXPERT' that doesn't know their topic and prints lies? How?"

Gridiron then went on to dispute (to put it mildly) what I had written. I said that "Alberta and New Brunswick have a $50,000 limit for accident benefits, but with no cap for minor injuries. P.E.I., N.W.T. and Nova Scotia have $25,000. In Newfoundland and Labrador there is an option to purchase $25,000 in coverage, while the coverage in Yukon is at $10,000. However, nowhere are there 'Caps for Minor Injuries' in any of these provinces."

"WRONG," Gridiron replied in capital letters. Gridiron had presumably done a quick internet search and countered with information that four provinces do have caps. "This isn't new," Gridiron wrote. "It also takes about 20 seconds to research.

"Be carefull (sic) who you believe and even less of what you read. The fact is Ontario will STILL have the highest benefits in the country under the new reforms. Do your own research, be informed. There is lots of direct information out there."

Wow. Gridiron sure showed me. So what do I have to say about that?

Actually ... I'm right.

Gridiron, you need to be careful about the thrill of a 20-second research project. You appear to be referring to Caps placed on Bodily Injury Lawsuits. The topic I was discussing was Caps placed on Accident Benefit Coverages for injuries.

Here's the difference:

Bodily Injury Caps limit the amount you can sue an insurance company for pain and suffering from an accident caused by another driver.

Accident Benefit Caps limit the amount an insurance company is going to pay for your medical treatment.

For example, if a driver runs a red light, hits your car and you're injured, your accident benefits cover you for medical treatment up to your policy limit - which in Alberta and New Brunswick is a $50,000 limit for accident benefits. In Prince Edward Island and Nova Scotia it's $25,000, it's $10,000 in the Yukon and Newfoundland and Labrador offers the option to purchase $25,000 in coverage.

None of these provinces have capped their coverage for minor injuries. But, beginning Sept. 1, Ontario's Accident Benefits coverage is going from $100,000 to a cap of $3,500 for minor injuries. (Resource: Insurance Bureau of Canada)

Not only is this a huge reduction of coverage that the Ontario driver needs to be aware of, but the announced reduction in premium is only going to result in an average savings of 1 per cent. Some drivers will experience no savings at all. Further, drivers will not be allowed to "buy back" a higher limit for minor injury coverage.

Now, if a driver runs a red light, hits your car and you're injured, you can sue for pain and suffering awards for minor bodily injuries up to the capped amounts.

Alberta has a cap for claimants with minor injuries and it is currently $4,518. (It's indexed to inflation), Nova Scotia's cap for minor injuries is $7,500. (indexed to inflation) and both New Brunswick and P.E.I. have a cap of $2,500 for pain and suffering awarded to claimants with minor injuries. (Resource: Insurance Bureau of Canada)

Ironically, the Ontario driver has no caps; instead there's a $30,000 deductible if they wish to sue for pain and suffering awards.

In other words, if an Ontario driver sues for minor injuries, he or she is entitled to nothing as there is a $30,000 deductible that must be paid to the insurance company before the driver is awarded any money from the lawsuit.

Further, Ontario drivers can only sue if the injury meets the verbal threshold of being a permanent or serious injury - which means you're required to prove your injuries are substantial and disabling.

Jeremy Diamond, of Diamond and Diamond lawyers, deals with this hardship all the time.

"I cannot tell you what a hurdle that is to overcome when you have minor injuries," he says. "Basically, if you are in pain for a year and then heal, you are entitled to nothing for pain and suffering. In theory, if you start a lawsuit and cannot overcome the hurdle of the deductible and the test of permanence, you could owe the insurance company money.

"That is why we often have to wait a year to launch these lawsuits to see if the person will heal or not within the first year," says Diamond. "This makes the whole process even longer. However, we have to wait to protect our clients to make sure they overcome what we call the 'threshold' and then sue. The process clearly favours the insurance companies."

I'd take those Bodily Injury Caps over Ontario's $30,000 deductible and the No Cap Coverage for my medical treatment over Ontario's minor injury cap of $3,500 any day.

What do you think Google has to say about that?

The parking lot: Where idiocy is king

Welcome to the magical land where anything goes and rules are for fools, writes Andrew Clark

Follow us on Twitter: @Globe_Drive

 

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