What you need to know about ON auto insurance reform
As the world changes around us so too must rules and regulations change. As part of an ongoing initiative to make Ontario auto insurance more affordable and convenient for consumers, the Financial Services Commission of Ontario (FSCO) approved several changes to insurance regulations. Here’s a quick breakdown of what changed and what it means for your wallet:
Premiums are lower
You’ve probably heard this before. Aside from the regulatory changes approved, regulators also approved a lot of lower rates across the province’s insurance companies. The approved changes resulted in an average rate reduction of 3.07% with some companies and some drivers getting bigger reductions than others. Sometimes, even if you’re a great driver, a company can’t reduce your rate as much as another company could. That’s why shopping around after significant changes to the auto insurance system is beneficial.
Statutory accident benefits have decreased
The standard amounts for Medical, Rehabilitation, and Attendant Care payouts have been significantly cut thanks to new policies combining and reducing these coverages.
Now a standard policy covers non-catastrophic injuries up to $65,000 while catastrophic injuries are covered up to $1,000,000. Previous limits were a combined $86,000 and $2,000,000 for non-catastrophic and catastrophic injuries respectively. For anyone whose life has been drastically affected by a car collision that reduction in coverage could be the difference between being able to put food on the table or not.
Optional benefit increases are available to make up for this reduction, but it will cost, and most people are likely to just take standard policies since they’re cheaper. Decide for yourself when it comes time to renew if your policy has the coverage amounts you feel you need.
More options than before for increasing your coverage
There is now a Dependent Care benefit and an Indexation benefit. Dependent Care will give you up to $75 per week for the first dependent and $25 per week for each additional dependent up to a maximum of $150 per week.
Indexation benefit adds an annual adjustment for inflation to many benefits.
Drivers now have the choice for the Caregiver benefit and Housekeeping and Home Maintenance expenses benefit to cover all injuries and not just catastrophic injuries.
Minor accidents won’t raise your rates
Even the best drivers get into little accidents eventually. With the changes to Ontario auto insurance regulations, infrequent minor accidents won’t tarnish your insurance rate. That means an at-fault accident resulting in no injuries and under $2,000 damage per car will now be forgiven essentially if the at-fault driver pays damages themselves with no insurer getting involved at all. One accident every three years will be ignored, so keep that in mind when deciding what to do if you’ve been in a minor accident.
More changes
- Non-earner benefit wait time has been reduced to four weeks from six months
- Monthly payment interest rate has been reduced from 3% to 1.3%
- Standard deductibles on comprehensive coverage policies has increased from $300 to $500
To understand exactly how your policy might be changing, it’s best to speak directly to your provider.