Changes to Ontario auto insurance coming June 1

In an effort to comply with a provincial promise tomake auto insurance premiums more affordable,auto insurance coverage will change on June 1, but along with lower-costpremiums will be cuts in coverage, warn industry experts.

"Some [benefits and coverage] have been reduced, some options for increased coverage have been eliminated or changed, and some new options have been introduced," warnedthe Financial Service Commission of Ontario.

Though the new rules take effect June 1, changes won't affect individual policy-holders until their policies come up for renewal.

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The most significant change will be to medical and rehabilitation care, whichwill be combinedwith attendant care as a single benefitfor both catastrophic andnon-catastrophic claims.

"This is the one we really want to educate our clients about," said MichaelBrattman, vice president of Erb and Erb Insurance and chairman of the Insurance Brokers Association of Ontario (IBAO).

The changes mean that:

• For non-catastrophic injuries, the current medical and rehabilitation care policy ($50,000) and attendant care ($36,000) will becombined and claimable up to$65,000 with the option of increasing the benefit to $130,000.
• For catastrophic injuries, the current medical and rehabilitation care ($1,000,000) and attendant care policies ($1,000,000)will be combined, and benefits up to$1,000,000 will claimable. Individuals will also have the option to increase thiscoverage to $2,000,000 for an extra monthly fee.

Brattmansays that means people who are seriouslyinjuredmight not have enough coverage for a lifetime of rehabilitation.

"In the event that you are in a catastrophic accident, we know that just in support services people would need, you're looking at $6,000 a month. In a period of 13 years or so you've probably exhausted that million dollar limit."

Not enough awareness

Despite best efforts by the province andinsurance brokers to inform consumers, Brattman says many drivers are unaware of the coming changes.

"We recently did a survey at IBAO and it indicated that 42 per cent of consumers weren't aware of these changes taking place." Brattman said. "While it's great that they can have some ability to determine their premium by buying different options, we want to make sure that they are informed."

The Financial Service Commission of Ontariorecommends that when drivers receive their next policy renewal package to read the changes carefully, compare it to the previous year's document and shop around.

Not all changes are bad

Some of the changes will end up saving drivers money, said Brattman.

Those changes include a reduction in the fees insurers charge for monthly, instead of annual, insurance premiums from threeper cent to 1.3 per cent.

And minor collisions, like a fender-bender will no longerbe considered an at-fault accident if damages are less than $2,000 and no one was hurt.