Minimum amount of liability insurance required by law might not always be enough

#AskKevinButler

Many Ontario drivers do not have adequate liability insurance coverage due to changes in the insurance laws seven years ago reducing benefits while offering drivers the opportunity to purchase additional coverage. Sadly, a new study shows up to 25 percent of motorists are not even aware the laws changed, and only seven percent of drivers purchased extended liability insurance and only six percent opted for extra medical coverage.

The auto insurance dilemma for Ontario residents

The 10 million drivers in Ontario can take pride in giving the province the lowest accident and fatality rates in the country. In return for their enviable safety record, drivers in the province pay the highest premiums. Part of the reason for this, according to a report from the provincial Ministry of Finance, lies in the manner in which the system is structured.

Every driver is required to have auto insurance composed of two parts:

• Statutory accident benefits: This is the no-fault portion providing benefits regardless of who was at fault in causing an accident.
• Tort or bodily injury: The second part of the required insurance covers a driver who is found to be at fault in causing an accident when an injured party institutes a court action seeking to recover damages.

The insurance coverages are mandated by the government, but it is left to private insurance companies to offer and sell policies to drivers. Other provinces, in contrast, have government mandated programs, but coverage is offered entirely through government agencies or partially through the private sector and the government.

How changes in the system affected drivers

The government reduced the benefits payable to someone injured in a motor vehicle accident. Before those changes went into effect, an injured party could receive up to $100,000 for medical and rehabilitation expenses. The changes implemented to the mandatory insurance now provide a maximum of $3,500 to accident victims suffering minor injuries, such as muscle strains and sprains. Serious injuries now offer a maximum benefit of only $50,000, which is half of what it would have been before the law changed.

Other reductions in the benefits available under mandatory coverage include reduction of attendant care benefits from $72,000 to $36,000. If your injuries force you to hire someone to come to your home to help with your care, your benefit ends when you reach the maximum regardless of the services being needed for a longer period of time.

Optional coverages you can purchase

Mandatory third-party liability insurance covers you against claims made against by someone injured in an accident. The mandatory minimum coverage is $200,000. You can purchase additional coverage up to $2,000,000 to insure against claims exceeding the minimum coverage.

You can also increase Statutory Accident Benefits to provide more benefits if you are injured in a collision. Optional coverages include:

• Medical, rehabilitation and attendant care  benefits
• Income replacement benefits
• Caregiver benefits
• Housekeeping benefits
• Home maintenance benefits
• Death and funeral benefits

Drivers may also purchase coverage to provide benefits to cover the cost of childcare. The coverage pays up to $75 a week for childcare for one child and another $25 a week for additional children.

Get sound legal advice when you need it most

Purchasing coverage over and above the mandatory liability insurance is a good way for you to protect yourself in case of an accident. Another way to ensure you receive the compensation to which you are entitled when tragedy strikes is by contacting the personal injury lawyers at Diamond & Diamond. They have a proven record of successfully obtaining compensation for drives injured in collisionscaused by the negligence of others. When you think you need a lawyer, contact our 24/7 injury hotline at 1-800-567-HURT or visit our website to speak to someone now about your claim. Consultations are free, and we have offices throughout Ontario.