We’ve previously mentioned the problem of high auto insurance premiums in Ontario, and the government’s ongoing commitment to bring the situation under control. Well, the Ontario government seems to have heard the cry or complaints of millions of Ontario drivers by greatly modifying the automobile insurance policy.

Two years ago, the Liberal government passed the Ontario Automobile Insurance Rate Stabilization Act (AIRSA), which established a target reduction of 15% over two years of the average private passenger auto premium.

In an effort to reduce auto insurance premiums across the province, the Ontario government has brought in a series of reforms that will create two significant changes:
1) How insurers can use “minor collisions” to affect rates
2) the new definition of catastrophic impairment

The first big change prevents insurance companies from raising an insured’s premium as a result of “minor” accidents – accidents in which no personal injuries are sustained, the cost of property damage does not exceed $2,000, and the cost of all damages is paid by the at-fault party. In addition, insurers cannot use minor accidents as a basis for decisions regarding setting a rate or in deciding whether to renew, cancel or issue a policy.

For the second big change, this year the government tried to revise the definition of catastrophic impairment in an effort to include only the most seriously injured persons. According to the Financial Services Commission of Ontario, the new definition of catastrophic impairment, in Ontario’s standard accident benefits schedule (SABS) includes new and/or updated definitions and criteria for traumatic brain injuries for adults and children, amputations, ambulatory mobility, loss of vision, and mental and behavioral impairments, and introduces a new process for combining physical with mental and behavioral impairments. The new catastrophic impairment definition also provides for an automatic designation of catastrophic impairment for children with traumatic brain injuries in specific circumstances. This new set of criteria will only apply to vehicular accidents on or after June 1, 2016.

We surmise that this change to the definition will create a narrower designation for catastrophic impairment, making it more challenging to identify who fits within the definition. It may also negatively affect the amount that victims who suffer catastrophic impairment can claim for damages.

While these changes should reduce drivers’ auto premiums across the province, the benefit comes at the potential detriment of future accident victims. If you are involved in an accident, speak to a lawyer to protect your rights by booking a free consultation or calling 1-855-446-7765 for immediate assistance. For more information, check out our accident section.