Ontario’s new “Fair Auto Insurance Plan’ raises many questions for personal injury lawyers who fear that car accident victims may be left without representation when battling insurance companies. The proposed reforms are intended to lower insurance premiums for Ontario drivers who pay the highest rates in the country, and pay 50% more than the average national price for auto insurance despite having below average accident rates and claims.
Part of the December 5th announcement includes the revision of the auto insurance scheme to “reduce costs in the system by changing the emphasis from cash payouts to ensuring appropriate care for victims”. While this sounds reasonable at first glance, when combined with the other proposed changes including independent assessment examination centres and treatment templates for common injuries it may leave many injured accident victims without adequate treatment, and at the mercy of their insurers.
The changes are meant to reduce fraud, however, there is no accurate estimate of fraud in the system so there will be no way to measure if this helps to prevent fraud. It may well reduce costs to the system simply by eliminating lawyer, expert medical care, and other treatment options from the system. This likely will not be to the benefit of injured parties, particularly those denied benefits by the insurers.
We must also consider that taking away cash payments means that people will not be able to hire lawyers on the current contingency system in which the lawyer gets paid only if, and when, the victim gets a cash settlement. By eliminating this option, victims who are denied benefits by their insurer will have significantly reduced options for fighting insurers.
The lowering of the high rates we pay must happen, but not at the cost of accident victims who I fear will suffer unduly from the proposed changes. Serious questions exist whether the proposed changes can even be implemented prior to the election.