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April 2024

Proposed Changes to Ontario Accident Benefits, and Potential Impacts on Tort Claims

Christopher Gallo
Christopher Gallo,

Maxwell Gill
Maxwell Gill,
Articling Student


By Christopher Gallo and Maxwell Gill

The 2024 Ontario Provincial Budget, titled "Building a Better Ontario" was recently released, and it proposes several changes to the automobile insurance regime, which could have profound impacts if adopted.

The first and most immediate impact would be the change of mandatory and optional benefits under an automobile insurance policy.

If implemented, medical, rehabilitation, and attendant care benefits would be the only mandatory accident benefit coverages.

All other accident benefits under a policy, including income replacement, non-earner, and housekeeping and caregiver benefits, may become optional.

The Provincial Government has suggested this change on the basis that it provides greater freedom for individuals to choose the benefits they would like to receive, with an eye toward lowering automobile insurance premiums. This will likely have a sizeable impact on both tort and accident benefit claims. On the AB side, the number of individuals entitled to the optional benefits will likely dramatically decrease once they are no longer mandatory, potentially also lowering accident benefit claim costs. However, in tort claims, Defendants would not benefit from the corresponding deductions from these policies for Plaintiffs who did not opt into these benefits. This could increase the cost of tort claims, and in particular loss of income claims, and could increase the total exposure insurers face.

The next change under the budget would cause automobile insurers to become the first payer for benefits in all automobile accidents, "regardless of the injury sustained."

As a result, claimants will not be required to exhaust collateral benefits prior to claiming benefits from automobile insurers. This will likely result in an increase in administrative efficiency, as the parties and Licence Appeal Tribunal will not need to spend extensive time working out the entitlement to collateral benefits, whether they were claimed, and the amount remaining. Instead, the parties can proceed directly to claim their benefits under auto insurance policies. However, this will result in a corresponding increase in costs for automobile insurers (at least at the outset, though these amounts may later be dealt with by assignment), as they can no longer rely on collateral benefits for a portion of the insured's claims.

The final proposed provision under the budget will not have an immediate impact but may be a portent for future changes the provincial government is considering.

The proposed budget suggests requesting that the Financial Services Regulatory Authority of Ontario (FRSA) conduct two investigations.

  • Investigation One - would be a review of the Professional Services Guideline and the Attendant Care Hourly Rate Guideline. The FRSA would review these guidelines and provide their findings to the Provincial Government. These findings would then be considered in future reviews of the Statutory Accident Benefits Schedule. While not explicitly stated, it stands to reason that the guidelines could be revised upward, to cover increased costs for these sorts of services.

  • Investigation Two - would be a review of the Health Service Provider Framework and the Health Claims for Auto Insurance (HCAI) system. This review would be focused on identifying "administrative and cost efficiencies to contribute to having a more modern and efficient system."

Seasoned claims professionals will likely remember the teething problems that have accompanied the implementation of HCAI and its subsequent revisions. We can only hope that any changes don't beget similar issues. While these investigations do not call for any changes and only consider the resultant findings, this may be the first step for broader changes.

If implemented, these changes could have drastic and varying impacts on Ontario accident benefit claims, as well as motor vehicle accident tort claims. It remains to be seen whether these changes succeed in creating any efficiencies in the system and lowering insurance premiums, and what changes to the costs born by Automobile Insurers arise.

Access the full budget, or read the relevant sections of the budget.

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