Cité Libre: Car insurance premiums in Ontario should go to victims

When it comes to auto insurance, you don't always get what you thought you paid for. If you become involved in an auto accident, you could be in for a shock.

More than 17 years ago, the Ontario government changed all auto insurance policies to include drastically expanded "no fault" benefits. This means that if you are injured in a car accident, your own insurance company will pay to replace some of your lost income and pay for some of your medical and rehabilitation costs, and other expenses. This is true even if you were the person who caused the car accident.

If you believe that the accident was not your fault, you may want to sue the other driver for the losses that aren't covered under the "no fault" rules. People who want to sue are usually people who have been badly hurt, who will take a long time - if ever - to recover from their injuries, or may never be able to work again.

Before you can recover any money for your pain and suffering, you must first prove that your injuries are severe enough, and that you will never get better. In other words, your injuries must reach a certain "threshold" before you can recover anything for your pain and suffering from the person who caused your injury.

This "threshold" has been part of no fault insurance since it was introduced to Ontario almost two decades ago. But in 2003 this threshold was changed so that fewer injured people are allowed to recover their actual losses caused by a wrongdoer. For example, if you are off work for two years before you are finally able to return, you cannot recover anything for your pain and suffering. If you are able to get back to work but cannot continue with your regular exercise and sports activities, and cannot play with your children or even lift them up to give them a hug, you cannot recover anything for your pain and suffering. Is this fair?

To add insult to injury, in many cases even if you do get over the threshold, the insurance companies get to keep part of your money through a deductible. Deductibles were also increased in 2003, so that injured people and their families get even less compensation. In most cases, the insurance company now gets to keep the first $30,000 of your money for pain and suffering! If one of your close family members is killed by another car, in most cases the insurance company gets to keep $15,000 of your money. This money goes right back to the insurance company of that person who caused your injuries, or the death of your family member. Is this fair?

To make matters worse, you may not recover all of your medical and rehabilitation expenses even when someone else caused your injuries.

As you can see, this is not about multi-million dollar settlements, since these rules don't have any impact on those larger cases. It's about average people who've been hurt being able to recover reasonable compensation. And it's about putting those people back in the position they were in - or as close to that as possible -before some stranger came along and caused all of their injuries and losses. This has been a principle of our legal system for centuries.

These and other harsh changes came about in 2003 because auto insurance companies raised premiums and threatened to raise them further. The politicians accepted the insurance companies' proposals, and as a result they took away many rights from innocent accident victims. Unfortunately Ontarians often do not know that their rights have been taken away until they become accident victims. When that happens, they are in for a rude awakening.

Since 2003, insurance companies have earned record profits on their property and casualty business in Canada which includes auto insurance: $2.5 billion in 2003, $4.7 billion in 2004, $4.65 billion in 2005 and $5.85 billion in 2006. The 2003 figure is important, because this was earned before the 2003 changes were brought in. This proves that insurance companies made a profit under the old rules, and could still do so without raising premiums.

The insurance companies said they needed to compensate fewer innocent victims and pay them less, or else they would raise premiums even higher. The politicians gave them what they wanted, and the companies made huge, record profits. Auto insurance in Ontario needs to be changed. Innocent accident victims should get the access to justice they deserve. It's only fair.

About the writer:

Greg Goulin is President of the Ontario Bar Association (OBA) and a lawyer practising in the Windsor, Ontario law firm of Goulin & Patrick. The OBA is the voice of the legal profession in Ontario, representing more than 17,000 lawyers, law students, law professors and judges across the province. For more information about the OBA please visit www.oba.org

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