Ontario Automobile Insurance Reforms 2016

A new standard Ontario automobile insurance policy will come into effect on June 1, 2016. The new standard includes reductions in coverage particularly as they relate to the Statutory Accident benefits (SAB) from the current auto policy.

This information is intended to assist brokers in the development and implementation of a plan for communicating with their clients about the Ontario Automobile Reforms. Further, it is designed to provide guidance on receiving and documenting client instructions relating to auto coverage in light of these reforms. Your clients are entitled to your advice on their options under the new standard auto policy. The presence of a clear and consistent approach toward communication and documentation will enable a broker to demonstrate, if asked, that meaningful steps were taken to service their clients in a conscientious and
diligent manner.

ILScorp will have brand new course on the Ontario Automobile Insurance Reforms 2016 available soon.

Highlights Summary

A new standard automobile insurance policy will come into effect on June 1, 2016.
The new standard includes reductions in coverage particularly as they relate to the Statutory Accident benefits (SAB) from the current auto policy.
Brokers are specifically encouraged to make all reasonable efforts to advise their clients of these changes.
As policies renew after June 1st, brokers should be prepared to review with their clients how the changes will impact them.
Brokers should ensure client files accurately reflect discussions and instructions received.

Background
As part of the Provincial budget announced on April 23, 2015, the Ontario Government has issued a number of automobile insurance reforms that will become effective on June 1, 2016. Of particular interest to brokers are a new Statutory Accident Benefits Schedule – Effective June 1, 2016 (“new SABS”). There are a number of other changes to related Regulations which will also be summarized in this document. This best practices document will focus primarily on the impact of the SABS reforms.

HOW THE REFORMS MAY AFFECT YOUR AUTO CLIENTS
The new standard Ontario automobile policy, to be effective June 1, 2016, includes several significant changes from the current standard policy including provisions that will result in lower coverage for clients.

SUMMARY CHART
A Summary Chart of the most significant new policy changes that take effect on June 1, 2016, including the current policy provisions as well as consumer choices under the new policy, are set out below:

Most Significant Changes
On June 1, 2016, if a consumer is buying a new policy or renewing an existing one, brokers should be aware of the most significant changes to auto insurance:

Some important things to remember about these choices:
Medical, Rehabilitation and Attendant Care benefits for minor injuries are fixed at a maximum limit of $3,500.

If clients purchase both the additional Medical, Rehabilitation and Attendant Care benefit for catastrophic injuries and for all injuries, the total eligible benefit amount for a catastrophic impairment would be $3,000,000.

Other Optional Benefits
There are many other options available to purchase additional or increased benefits and coverages. The following chart lists some but not all of those and indicates if those options will change on June 1, 2016. Clients can also choose not to increase any benefit or coverage. Brokers should let clients know if they had previously purchased any optional benefits. A further review of documents is required as they may have changed.