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Proposed changes to regulations governing Ontario’s auto insurance are welcome, even though it’s not clear if they will be extensive enough, says insurance defence lawyer Heather Vaughan.
“The goals of lowering costs, making the market more competitive, increasing choice and streamlining the process are really good objectives, but we will have to wait and see how it all plays out,” says Vaughan, a partner with Benson Percival Brown LLP.
“I’m cautiously optimistic about the reforms, though in some ways it seems to be a little bit of tweaking a broken system as opposed to a complete reformation of the system,” she says.
Putting Drivers First program
According to a Toronto Sun story, the measures contained in the provincial government’s Putting Drivers First blueprint are meant to reverse rising policy rates by making the system more streamlined and efficient.
“The government is on the right track in terms of what they’re looking at,” says Vaughan. “There’s no question that automobile insurance reform is needed. We pay really high rates, there is fraud in the system, and there’s money being spent on things other than helping injured parties get on with their recovery.”
Raising the limit for catastrophic injuries to $2 million after the previous Liberal government lowered it to $1 million is a praiseworthy development, Vaughan says, adding, “This is good news for people with severe injuries, who may not have other sources of funding.”
The plan calls for treatment protocols for minor injuries resulting from accidents, though she says something similar is already part of the Minor Injury Guidelines (MIG), which aim to provide speedy treatment and cost certainty to people whose medical and rehabilitation care will cost $3,500 or less.
“If you fall within that limit, there is a treatment protocol set up for you. If you need treatment beyond that, you have to advocate for yourself and get proof that you fall outside those limits.”
As an insurance defence lawyer, Vaughan says she is pleased that the government wants to raise the cap that can be claimed under simplified procedures rules to $200,000 from $100,000.
“It’s pretty clear that many smaller personal injury claims should be handled with simplified procedures and not the subject of more costly litigation,” she says. “I also like the idea of not having juries, and capping the number of experts that can testify in these simplified cases.”
The Sun story notes that drivers will “gain greater flexibility in shopping for auto policies, and options to lower rates by allowing insurers to consider their credit history or consenting to use preferred auto repair or health-care providers.”
System needs modernizing
According to the news report, insurers will be allowed to use more electronic communications and e-commerce tools, with drivers ditching pink paper slips in favour of online verification of insurance.
“Modernizing the system in terms of how clients and companies communicate will be really important, and I’m sure there are other parts to the system that can be streamlined, leading to savings,” Vaughan says.
Looking at the reforms as a whole, she says she is generally happy with the intent of the proposals.
“The goals of this legislation are laudable, and many areas that need to be addressed seem set to change,” Vaughan says. “We will see what happens when the rubber hits the road once these reforms are formalized.”
