With seven months under
their belts since significant new
changes to the Statutory Accident Benefits Schedule (SABS)
were introduced in Ontario last
September, lawyers, adjusters,
health care providers and accident victims are only now
beginning to see the real life
consequences of the new SABS.
The effect of some changes has
been immediate; others will
only be felt with the passage of
time. Just when the Bar had
figured out most of the old
SABS, new language has been
added which will trigger a fresh
round of litigation.
ANDREW
MURRAY
substantiating the quantum of
the benefit);
n;indexation of the limits for
most of the others.
Optional benefits have never
been a big seller in Ontario.
Early indications seem to suggest that this trend has not
changed. Policyholders who
bought optional benefits are as
rare as Sasquatch sightings.
Anecdotal information in the
industry suggests the historical
uptake rate for optional benefits
averaged three per cent of consumers and has not increased
since September.
The philosophical change to
the way auto benefits is packaged—an unbundling of benefits, so that consumers can customize the policy to purchase the
specific benefits that are
needed — leaves all consumers
with significantly reduced benefits unless some of the optional
benefits are added. Accident victims who failed to think through
their coverage needs will find
themselves without enough
insurance protection following a
car crash. There will be cries of
anguish in the months ahead
when this reality sets in.
“Optional benefits have never been a big seller
in Ontario. Early indications seem to suggest
that this trend has not changed. Policyholders
who bought optional benefits are as rare as
Sasquatch sightings.
ment of attendant care benefits
to those persons who have provided the care in the course of
the employment, occupation, or
profession they would ordinarily
have been engaged in but for the
accident, or to someone who has
sustained an economic loss as a
result of providing the care.
Commonly, when an accident
victim was discharged from hospital, he or she would be cared
for at home by a family member.
This arrangement is in jeopardy,
with the accident victim either
having to hire strangers to come
into the house or, in some cases,
having to be discharged from
hospital to some type of long-term care facility.
The new language in the
SABS, unquestionably, has
increased the rates of denial of
claims for attendant care bene-
fits. Case law has yet to establish
parameters on the new “incurred
expense” provisions, but early
indications suggest there will be
litigation to follow. Even the
front-line adjusters appear some-
what dismayed at the impact that
this change has had, often being
heard to apologetically state that,
while they would like to help,
“their hands are tied,” given com-
pany policy or the limitations of
the new SABS.
but also to determine the date of
a policy renewal to see whether
the old or the new SABS apply to
the accident.
More than one insurance
adjuster has been heard to say
that it will be a relief to make it
to September, the one-year anniversary of the new SABS, which
will then eliminate the need to
check and double-check the
applicable policy dates as the
period of transitional benefits
will then expire.
Optional benefits
The concept of optional benefits is not new, but the laundry
list of options available to
policyholders has certainly
expanded under the new SABS.
They include:
n;a housekeeping benefit;
n;a caregiver benefit;
n;a buy-up of increased income
replacements (IRBs) to a maximum of $1,000 per week (which
is still contingent on pre-acci-dent income following a crash
Incurred expense provisions
Front-line adjusters and
plaintiffs’ lawyers alike are seeing the impact of the new
requirement restricting the pay-
Transition rules
If your insurance policy has
not yet been renewed since September, you are still entitled to
a level of benefits consistent
with the old SABS (although
even this is subject to a number
of exceptions).
In the short run, handling of
accident benefit files in Ontario
has been complicated by the
need to secure a copy of the
insurance declaration sheet, not
only to scour it for the possibility
(however faint) that there could
be optional benefits available,
Cap on assessments
The new SABS imposes a
$2,000 cap on the cost of a medical assessment that will be reimbursed by the insurer. Many
assessments simply cannot be
funded within this cap—for
example, a comprehensive neuro-psychological evaluation. The
changes have created an
unintended hardship.
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Advice for the public
In theory, one goal of the new
SABS was to reduce complexity
in the system. Ironically, the
SABS is longer and more detailed
after the new changes, not shorter
and simpler.
All drivers should take a lesson and carefully review their
own policy of auto insurance to
ensure that the right basket of
optional benefits has been purchased. If there is a value to the
new system with more options
and the ability to customize a
package of insurance, that value
will be lost if policyholders overwhelmingly default to the minimum bundle of benefits. After
an accident has occurred, it is too
late to realize that you need
housekeeping, but do not have
that benefit, or that you need
more than the minimum $50,000
of medical and rehabilitation
coverage. If a spouse has a job
with a high salary and no access
to long-term disability benefits,
careful consideration of the IRB
top-up option, along with indexation, is warranted.
For parents with children, the
optional caregiver benefit should
be examined, along with the possible need for access to higher
limits for care costs. In a buyer
beware culture, this caution is all
the more applicable to the new,
unbundled package of auto insurance benefits. n
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Andrew Murray is a partner
at Lerners LLP in London, Ont.,
the co-chair of The Advocates’
Society personal injury and
insurance law practice group,
and currently sits as vice-president on the Board of Directors of the Ontario Trial Lawyers’ Association.
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