The Importance of Having Adequate Car Insurance Coverage for Accident Benefits

This article is taken from an interview with Ron Folkes, LL.B., Personal Injury Lawyer with Folkes Legal Professional Corporation, a Brampton Ontario Personal Injury Law Firm.

When people buy or renew their car insurance, the standard rate in Ontario for income replacement benefits is a maximum of $400 per week calculated at 70 percent of their gross pay before the injury. For most consumers this is inadequate. These payments are tax free.

If a person’s gross pay is higher than $600.00 per week, they should be exploring buying optional weekly benefits. For instance, if your average pay before deductions is $1,000 a week, 70 percent of that is $700 a week, so if you have standard coverage for your accident benefits and you are only getting $400 a week, you have a $300 weekly loss. If you’re involved in an accident, and you are at fault, you are never going to recover that additional $300 a week. If it is somebody else’s fault, you have to wait till the end of the case to recover that additional $300 weekly loss. It is an inexpensive source of disability insurance especially for those who are seriously injured. Many consumers do not have other Short-Term Disability (STD) income replacement benefits available from their employer or private insurance plans.

The cost of buying optional accident benefits is not prohibitive. It is something that people should consider if they have a gross pay of more than $600.00 per week and no other STD benefits, especially today when people have big mortgage payments, car payments and all the other family expenses which continue after an injury. If they are unable to work for an extended period of time after a car accident, it is very important that they have as much money by way of income replacement benefits as they are possibly entitled to, to maintain family expenses and avoid the further stress of financial hardship, on top of the stress of recovering from a serious injury.

As of June 1, 2016 the definition of Catastrophic Impairment was changed to make this designation unavailable to many injured accident victims who were previously eligible. Should you be seriously injured, the standard benefit will not pay for many of the medical needs and costs needed to be able to function with assistance and achieve some degree of recovery.

We urge all Ontario residents to purchase increased Medical and Rehabilitation and Attendant Care benefits and the optional Catastrophic Impairment benefit. The increased cost is likely under $50.00 per vehicle for most motorists.

Very few people are aware that they can buy additional benefits. Many people simply shop around for the cheapest possible insurance policy, which is not always the best option. I advise people not to buy the cheapest insurance policy available. Rather, buy the insurance policy that is going to give you and your family appropriate protection. You should have at least one (1) million dollars of third party liability and preferably two (2) million dollars. This can make a huge difference, if you are injured by an uninsured driver. Also, your accident benefits, especially with respect to your income replacement benefits, should be equivalent to 70 percent of your weekly pay before deductions. Too few people buy the increased benefits that are available to them, even though the cost is very reasonable. These features can make a material difference to you and your family in case of a car accident causing serious or disabling injury.

In June 2016, many of the medical rehabilitation and related benefits in Ontario’s auto policies which had been reduced in October 2010 were further reduced or eliminated by insurers, unless optional benefits are purchased. You may need these important benefits in the event that you are seriously injured. These include Caregiver, Housekeeping and Home Maintenance up to $100,000, Attendant Care, Death and Funeral Benefits and Care of Dependants. All auto policy holders received a letter explaining the available optional coverage. Very few consumers read or understood this letter.

The cost to restore these benefits to their pre-October 2010 level is modest and well worth the extra cost, if you are injured. These features may be of the most benefit to families with children or dependant adults who may require assistance if the principal homemaker or earner of the household is disabled by an auto collision injury.

Consumers should be aware that the deductible applicable to damages awards for personal injuries suffered in vehicle accidents was increased to almost $37,000.00 in June 2016. Many lawsuits for whiplash-type injuries are no longer viable. It is very important that your Accident Benefits should be enhanced to offset this loss of your rights to compensation from at-fault drivers.

If you, or someone you care about, are dealing with Personal Injury law issues in the Peel Region – Brampton/Mississauga/Caledon, Ontario, contact Folkes Legal Professional Corporation at 905-457-2118.

Note that laws vary from province to province. Please consult with a lawyer in your own area to be sure of the laws and specific issues in your own jurisdiction.

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