Plan to restore catastrophic benefit limit may still not be adequate

News that the province plans to restore the default benefit limit for catastrophic injuries to $2 million is a “step in the right direction” but it is still not adequate in many cases, says Toronto critical injury lawyer Dale Orlando.

This announcement was part of the Progressive Conservatives’ Putting Drivers First plan to reduce auto insurance rates, CBC News reports. The “sweeping plan” was revealed in the government’s budget.

“When it comes to driving, it is clear that Ontario’s auto insurance is broken, and drivers deserve better,” Finance Minister Vic Fedeli said in his speech to the legislature, where he called the plan “transformative.”

Orlando, partner with McLeish Orlando LLP, says while the measure is very favourable to accident victims, many drivers are not even aware the benefit was slashed in half in 2016.

Cost-saving measure

“Meeting the test for catastrophic impairment was made much more difficult in June 2016,” he says. “At the same time, the benefit was cut in half from $2 million and was sold to the public as a cost-saving measure that would allow for cheaper insurance premiums.

“The whole idea of choice was a way of selling this to the public while trying to satisfy the promise they made to reduce insurance premiums by 15 per cent, which they didn’t even come close to doing,” Orlando says. “To do that on the backs of catastrophically injured people makes zero sense to me.”

He notes the former Liberal government made the promise to cut insurance rates in 2013, which it later called a “stretch goal.” Along with the reduction in catastrophic benefits, motorists could choose less coverage, and those who wanted to purchase optional insurance could buy up.

Most people aren’t aware they have an option to buy more coverage, Orlando says.

“The fact of the matter is very few people buy additional coverage. In my practice, virtually nobody I meet is even aware there was an option to buy up,” he says.

Orlando notes that a catastrophic designation doesn’t mean automatic benefit entitlement, it simply means they are available if you should need them.

‘Prove reasonable need’

“You still need to prove a reasonable and necessary need for the item or service,” he says.

If the catastrophic benefit amount is restored and the stricter test for entitlement remains, it’s a near certainty that everybody who now gets the designation needs 100 per cent of the money available to them, Orlando says.

“A million dollars sounds like a lot of money, but it really isn’t if you need 24-hour care for the rest of your life. If you sustain a spinal cord injury and require around-the-clock attendant care, the maximum is $72,000 per year. If you were catastrophically injured in a car crash when you were 20 years old, those benefits would barely cover 14 years of care. What do you do when you’re 34?

“We see it in our cases all the time. Two million dollars in benefits is obviously better, but it’s still not adequate in many cases,” Orlando says.