Not surprisingly, many Ontario residents know very little about our overly complicated auto insurance system but are, rightfully, concerned about the rising cost of insurance premiums. As a result of powerful insurance industry lobbying efforts a number of changes to our auto insurance system have been implemented in recent years. These changes have drastically reduced the benefits available to injured claimants while resulting in no reductions in the insurance premiums Ontario motorists pay. The outcome is a significant increase in insurance company profit margins while the availability of treatment and medical benefits to an injured person gets slashed from $100,000 to $3500 (as one example).
Yet again, the current Ontario Government has proposed and is considering further changes, in Bill 171, that will negatively affect the rights of injured claimants in this province.
The proposed changes in Bill 171 include a reduction of the prejudgment interest rate in pain and suffering claims from 5 per cent to 1.3 per cent. This will result in insurers profiting, particularly in the more serious cases, from delaying settlement and payment of an injured person’s claim indefinitely. When an insurer is able to get 4 per cent or more on their money, and they only have to pay interest to a claimant at 1.3 per cent, there is a strong incentive for the insurer to delay the claim as long as possible.
Our system is already fraught with numerous delays and unnecessarily complicated Rules that govern the litigation of a claim. An additional financial incentive to delay a claim will have a very negative impact on injured claimants already waiting far too long for settlement or judgment of their claims.
Bill 171 also proposes to wipe out recourse to an independent judicial system for disputes regarding denials of benefits under the Statutory Accident Benefits Schedule (SABS). The amendments would replace a citizens fundamental right to access the courts and require them to seek resolution to their dispute from a tribunal that is appointed at the whim of government, whose members will lack independence and security of tenure and which will over time be captured by the insurance industry and populated by former insurance industry employees.
There is simply no intellectual justification for locking the courthouse doors to injured accident victims. It is a false pretence to suggest these changes will provide cost savings to the insurance industry or reduce insurance premiums to motorists. More importantly, it is another in a series of ongoing amendments to our auto insurance system that negatively impacts the rights of people who suffer serious injuries in motor vehicle accidents.