Changes to the Automobile Insurance Policy: Things You Need to Know
Any person who is injured in a car accident is entitled to claim for Statutory Accident Benefits from their own insurance company. These benefits include:
• Medical / rehabilitation benefits;
• Attendant care benefits;
• Caregiver benefits;
• Income replacement benefits;
• Housekeeping and home maintenance benefits;
• Dependant care; and,
• Funeral benefits.
As of September 1, 2010 the Government of Ontario created new legislation which decreases a person’s entitlement to accident benefits. As a result of this change the amount of entitlement to certain benefits has decreased substantially.
For example, an injured motorist is now only entitled to a maximum of $50,000.00 in medical / rehabilitation benefits for non-catastrophic injuries. This amount was lowered from $100,000.00. As a result, an injured motorist may no longer be compensated by his/her own insurance company for treatments such as physiotherapy or chiropractic once they have expensed over $50.000.00 in treatment and/or assessments.
Further, attendant care benefits have also been lowered from $72,000.00 to $36,000.00 for non-catastrophic injuries. This represents a reduction in how much an injured motorist can claim to provide in-home care for him/her while injured.
Housekeeping and home maintenance benefits as well as caregiver benefits for non-catastrophic injuries have been eliminated entirely from standard policies. Prior to the change, an injured motorist was entitled to a maximum of $100.00 / week in housekeeping and home maintenance benefits, for a period of no more than 104 weeks. Likewise, before the change an injured motorist could be entitled to caregiver benefits in the amount of $250.00 / week for the first child and $50.00 each for each additional child under the age of 16. Now an injured motorist will not be entitled to any housekeeping and home maintenance benefit or caregiver benefit unless they specifically purchase optional coverage.
Overall, the amount of Statutory Accident Benefits that Ontario’s motorists were once guaranteed under their automobile policy has now drastically decreased. The Government of Ontario has now left it up to each individual motorist to buy optional coverage, at an added expense, to provide for benefits which they had enjoyed prior to September 1, 2010.
Ontarians would be well advised to call their insurance company and/or insurance broker to discuss what coverage is currently available to them. Given the individual’s specific needs it may be recommended that a person buy optional coverage to increase the amount of Statutory Accident Benefits available to them in the event that they are injured in a motor vehicle accident.
Unfortunately, only 3% of Ontario’s motorists bought optional coverage prior to the change in legislation. As the cost of car insurance seems to always be increasing and given the fact that consumers are often solely interested in buying the cheapest policy, it is unlikely that consumers will take an interest in the changes to the Statutory Accident Benefit legislation and buy additional coverage. This may prove to be problematic for consumers down the road.
Civil Litigation
Thursday, March 31, 2011
Thursday, March 24, 2011
Henson Trust
Henson Trust: Financial Protection for a Disabled Individual
Setting up your estate plan can be a stressful time filled with difficult decisions. A concern for many individuals is how to protect and provide for a disabled family member in the event of their own incapacity or death.
The provincial government of Ontario has implemented various programs for individuals in need of financial and personal assistance. In particular, the Ontario Disability Support Program (ODSP) helps people with disabilities by providing financial assistance for living expenses, as well as health benefits, such as drug coverage, dental coverage and vision care.
The decision on whether an individual qualifies for a disability pension is based on their income and financial assets. As such, if a disabled individual were to receive their inheritance outright, it could detrimentally affect their eligibility to receive a disability pension.
Unfortunately, many individuals construct their Will to leave an outright distribution to the disabled individual. Upon receiving the gift, the disabled individual becomes ineligible for a disability pension. They are forced to use their inheritance as a primary source of support, until the inheritance diminishes to a small amount acceptable to the ODSP.
To avoid this scenario it is often appropriate to use a Henson Trust within the Will instead of an outright distribution. In the originating case, Ontario (Ministry of Community and Social Services) v. Henson, the Court held that because the disabled individual could not compel payments of funds, the funds held in the Henson Trust did not affect his eligibility for disability support programs.
A Henson Trust is a form of absolute discretionary trust, in which the funds are managed for the disabled individual – usually over the course of their lifetime – without them ever having a vested right to the income or capital. The trustee maintains absolute discretion over the timing and amount of payments of funds to the disabled individual.
When setting up a Henson Trust, one must be careful who they select as trustee. This individual will have absolute discretion over the amount of funds they provide to the disabled individual out of the Henson Trust. A decision will also need to be made on whom the funds will vest with upon the death of the disabled individual. If this is the same person as the trustee, it may create a conflict and detrimentally affect the disabled individual. Much thought should be given to these issues during the planning stages.
In summary, the correct implementation of a Henson Trust will shelter funds for the disabled individual in case of an emergency, while ensuring that they continue to receive a disability pension.
David Henderson
Trusts, Estates and Wills
Setting up your estate plan can be a stressful time filled with difficult decisions. A concern for many individuals is how to protect and provide for a disabled family member in the event of their own incapacity or death.
The provincial government of Ontario has implemented various programs for individuals in need of financial and personal assistance. In particular, the Ontario Disability Support Program (ODSP) helps people with disabilities by providing financial assistance for living expenses, as well as health benefits, such as drug coverage, dental coverage and vision care.
The decision on whether an individual qualifies for a disability pension is based on their income and financial assets. As such, if a disabled individual were to receive their inheritance outright, it could detrimentally affect their eligibility to receive a disability pension.
Unfortunately, many individuals construct their Will to leave an outright distribution to the disabled individual. Upon receiving the gift, the disabled individual becomes ineligible for a disability pension. They are forced to use their inheritance as a primary source of support, until the inheritance diminishes to a small amount acceptable to the ODSP.
To avoid this scenario it is often appropriate to use a Henson Trust within the Will instead of an outright distribution. In the originating case, Ontario (Ministry of Community and Social Services) v. Henson, the Court held that because the disabled individual could not compel payments of funds, the funds held in the Henson Trust did not affect his eligibility for disability support programs.
A Henson Trust is a form of absolute discretionary trust, in which the funds are managed for the disabled individual – usually over the course of their lifetime – without them ever having a vested right to the income or capital. The trustee maintains absolute discretion over the timing and amount of payments of funds to the disabled individual.
When setting up a Henson Trust, one must be careful who they select as trustee. This individual will have absolute discretion over the amount of funds they provide to the disabled individual out of the Henson Trust. A decision will also need to be made on whom the funds will vest with upon the death of the disabled individual. If this is the same person as the trustee, it may create a conflict and detrimentally affect the disabled individual. Much thought should be given to these issues during the planning stages.
In summary, the correct implementation of a Henson Trust will shelter funds for the disabled individual in case of an emergency, while ensuring that they continue to receive a disability pension.
David Henderson
Trusts, Estates and Wills
Monday, March 14, 2011
Reporting Minor Collisions
Why You Should Always Report a Minor Collision to Your Insurer
Every motorist in Ontario is required by law to have automobile insurance. In fact, the law requires that everyone have certain mandatory minimum insurance coverages. As many of you also know, you can purchase additional coverage for an added fee which provides you with increased or additional benefits in the event of an accident. What you may not know, however, is that each policy holder has certain responsibilities that, if not followed, can invalidate an insurance policy, leaving a motorist without coverage when they need it most. This article will provide you with some insight into a common situation which can result in a breach of your automobile insurance policy, and a forfeiture of your coverage.
Following a seemingly minor at-fault collision a motorist may be enticed not to report a collision by the fear of rising insurance premiums or persuaded by the victim motorist to “not go through insurance” and simply pay for any property damage out of pocket without notification to the insurer. While this may sound like an attractive option, it could also lead to some substantial problems down the road. Your insurance policy requires you to, among other things, provide written notification of any incident which results in personal injury or property damage within 7 days. The policy also prohibits you from admitting liability or responsibility for the collision. Paying for property damage following an at-fault collision could be seen as an admission of liability or responsibility for the collision, which is not only a breach of your policy, but could substantially impact on your Insurer’s ability to defend you if you are ultimately sued by a victim as a result of the impact.
Ontario law makes it possible for victims of a collision (driver or passenger) to sue an at-fault driver for personal damages resulting from an accident. These damages could result from any personal injuries which flow from the seemingly minor collision, and may not have been apparent immediately following the accident. A victim has 2 years upon which to commence a court action, and too often the victim fails to provide timely notice prior to issuing a claim. As such, you may have long since forgotten about the accident, when you are suddenly served with a Statement of Claim. While your Insurer would ordinarily assume your defence and any payout for the claim up to the policy limits of the contract, a failure by you to abide by your responsibilities under the policy may well compromise this protection.
Taking some time to review the Ontario Automobile Policy (OAP 1) can provide you with more information about how to ensure you will be protected in the event you are in an accident, or have to make a claim under your policy. The OAP1 can be viewed at http://www.fsco.gov.on.ca/ (see the auto insurance consumer resources section of the website).
Kelly Dunn
Civil Litigation
Every motorist in Ontario is required by law to have automobile insurance. In fact, the law requires that everyone have certain mandatory minimum insurance coverages. As many of you also know, you can purchase additional coverage for an added fee which provides you with increased or additional benefits in the event of an accident. What you may not know, however, is that each policy holder has certain responsibilities that, if not followed, can invalidate an insurance policy, leaving a motorist without coverage when they need it most. This article will provide you with some insight into a common situation which can result in a breach of your automobile insurance policy, and a forfeiture of your coverage.
Following a seemingly minor at-fault collision a motorist may be enticed not to report a collision by the fear of rising insurance premiums or persuaded by the victim motorist to “not go through insurance” and simply pay for any property damage out of pocket without notification to the insurer. While this may sound like an attractive option, it could also lead to some substantial problems down the road. Your insurance policy requires you to, among other things, provide written notification of any incident which results in personal injury or property damage within 7 days. The policy also prohibits you from admitting liability or responsibility for the collision. Paying for property damage following an at-fault collision could be seen as an admission of liability or responsibility for the collision, which is not only a breach of your policy, but could substantially impact on your Insurer’s ability to defend you if you are ultimately sued by a victim as a result of the impact.
Ontario law makes it possible for victims of a collision (driver or passenger) to sue an at-fault driver for personal damages resulting from an accident. These damages could result from any personal injuries which flow from the seemingly minor collision, and may not have been apparent immediately following the accident. A victim has 2 years upon which to commence a court action, and too often the victim fails to provide timely notice prior to issuing a claim. As such, you may have long since forgotten about the accident, when you are suddenly served with a Statement of Claim. While your Insurer would ordinarily assume your defence and any payout for the claim up to the policy limits of the contract, a failure by you to abide by your responsibilities under the policy may well compromise this protection.
Taking some time to review the Ontario Automobile Policy (OAP 1) can provide you with more information about how to ensure you will be protected in the event you are in an accident, or have to make a claim under your policy. The OAP1 can be viewed at http://www.fsco.gov.on.ca/ (see the auto insurance consumer resources section of the website).
Kelly Dunn
Civil Litigation
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