Judith Hull & Associates

Accident victims aren't responsible for rising insurance costs

Waterloo Region Record
Tuesday, April 7, 2009
Page: A7
Section: Insight
Byline: Robert Deutschmann
Column: SECOND OPINION

As a personal injury lawyer with a practice that primarily helps people injured in car accidents, I have a thorough knowledge of the accident benefits system and the experience of many accident victims in dealing with their auto-insurance company. I was quite surprised by the story regarding auto insurance in Ontario. (Is A Big Jump Coming In Car Insurance? The Numbers Say 'Yes' -- March 28.)

The insurance industry claims that accident benefit costs have significantly increased. These claims are based on numbers that are generated by the insurance industry alone. I did not see reference to any independent body or government agency to verify the accuracy of the claims. I do not believe that you will find any such resource. We have no details about this increase. We are left with the impression that this increase is the fault of accident victims.

I note no reference in the article to the record profits earned by the insurance industry during the period from 2003 to 2007. Those numbers would tell a different story. How bad off is the auto-insurance industry in Ontario when we recently had ING sell its business in Ontario and that new entity is now looking to make acquisitions in this industry.

The cap on accident benefits has been $100,000 for several years now. The insurance industry has always agreed to this cap. It should have been reported that the insurance industry benefits from a $30,000 deductible that applies to every claim brought by a victim of a car accident for pain and suffering. There is also a threshold test, a hurdle, for bringing a law suit that must be overcome by an accident victim before a claim can be brought. This threshold is one of the toughest in North America. The insurance industry in Ontario benefits from both a deductible and a threshold test. Ontario is the only jurisdiction in North America where the insurance industry benefits from both a deductible and a threshold test.

The auto-insurance industry has sought and obtained changes to auto insurance in the past. It obtained a change in the independent assessment system from designated assessment centres (DACs) to independent medical assessments (IMES). The rationale was that this would reduce costs. The opposite occurred. There has been a significant increase in the costs of medical assessments, primarily insurance industry generated.

It would follow that when a driver contracts with his or her insurer for coverage, that driver, once injured is entitled to medical and rehabilitation services up to the contracted amount. Now, when the insurance industry's figures allege that a car-accident victim uses, on average, $44,000 in benefits, they claim there is a problem. Certainly the insurance industry made significant profits during the previous five years under the same system.

Regardless of how long a claim is open, where a victim needs medical assistance it should be provided, to get that person back to his or her pre-accident condition, if possible.

If there are problems in the system then let's focus on the administrators of the system and the service providers, more so than the victims.

From my experience, most victims will use significantly less than half the medical benefits available to them. The overall costs in accident benefits are also contributed to by the insurers.

The Record story had no reference to the thousands of dollars that the insurance industry will spend on medical assessments to assess denied treatment plans, rather than directing those funds to diagnosis, rehabilitation and treatment. There is no reference to the difficulties and cost of mediating or arbitrating a claim where there is a dispute between the accident victim and the insurer. Picture the accident victim, suffering from injury, now having to fight his or her auto-insurance company for medical treatment in a dispute process defined in the insurance regulations. It is not easy.

What is the real problem here? Is it the amount of accident benefits being used, which by the insurance industry's own figures is less than half of what a victim is entitled to, or are there other factors as indicated in the story like "a spike in the water and wind damage claims in home property insurance across the country, coupled with investment markets tanking?"

Any problems with accident benefits cannot be laid squarely at the feet of accident victims. The insurance industry, treatment providers and other stakeholders need to be involved.

Robert Deutschmann is a lawyer with Paquette Travers and Deutschmann in Kitchener.

Back to News