Insurance industry review delivers justice for auto accident victims and their families

Financial Services Commission of Ontario recommends reducing deductibles for injured victims and eliminating them for families of deceased victims

TORONTO, April 3 /CNW/ - The five-year review of the insurance industry undertaken by the Financial Services Commission of Ontario released this afternoon is good news for accident victims facing massive deductibles imposed by auto insurers.

The Ontario Trial Lawyers Association (OTLA) and the Ontario Bar Association (OBA) welcomed the report, particularly Recommendation No. 31, which advises the government to reduce the deductibles for injured accident victims currently at $15,000 and $30,000 down to $10,000 and $20,000.

Furthermore, FSCO recommended current deductibles charged to families of deceased accident victims be eliminated for awards covering pain and suffering. These deductibles were charged to awards under $50,000.

"Financial Services Superintendent Robert Christie has quite appropriately recognized the punitive nature of the deductibles kept by the insurance industry," said OTLA President Patrick Brown. "Mr. Christie has recognized these victims and their families have been denied access to justice by the insurance industry."

"We look forward to working with the McGuinty government and the insurance industry to implement these changes without distractions from industry threats about increased premiums," said Richard Halpern, Chair of the Ontario Bar Association's Automobile Insurance Working Group. "As it has been doing for weeks, the insurance lobby will likely now claim that they need higher premiums to afford the kinds of smart, progressive changes in the FSCO report. But the insurance industry has always been one of Canada's most profitable - and, in our view, they can easily afford the progressive and sensible changes proposed in the FSCO report."

The FSCO review also recommends a study aimed at further tort changes that would increase access to justice for citizens. The OBA and OTLA look forward to co-operating fully with any future study with the insurance industry.

Today's report also comes as welcome news to families who were charged excessive deductibles by the insurance industry after losing a loved one to an auto accident. Several family members banded together in Toronto in June, 2008, to publicly call for reform.

Justice Coulter Osborne, author of the 2007 review of the civil justice system, referred to the deductibles as a "tax on pain."

The family of Julia Rushnell, who lost her parents when a truck hit their car in a 2004 crash, could be forced to pay up to $300,000 in deductibles, after more than four years of foot-dragging by the insurance company representing the truck's driver.

"No amount of money will bring back my mother and father," Ms. Rushnell said. "But if these recommendations on deductibles are approved, at least other families won't have to go through the pain and misery that our family was forced to go through by an insurance industry that does not really care about victims."

Stephen Nelson lost his mother in a similar 2004 accident. The insurance company held back $165,000 in deductibles against compensation awards to Mrs. Nelson's children and grand-children, but not until after making the family sue the company to force it to live up to its obligations.

"It's gratifying to see that the voices of the families of innocent accident victims have finally been heard in the corridors of power," Mr. Nelson said today. "My hope now is that the government will resist the efforts of the insurance industry to again attempt to evade their responsibility to those who have suffered losses."

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