The benefits you will lose as of June 1, 2016

A couple of weeks ago I alerted readers to the coming changes to Ontario car insurance. The government of Ontario, in close collaboration with the insurance companies, has planned these changes for motorists. You may recall the letter you received asking you to collaborate on something that will greatly affect your life. No? Alas, it’s too bad you missed the memo.

Benefits Gutted Again

Starting on June 1, 2016, standard medical, rehabilitation and attendant care benefits will have a maximum combined limit of $65,000 for non-catastrophic cases. After that money is spent, you are on your own. Since September 2010, that limit has been $86,000. Before that it was $172,000.

While the cost of health care keeps rising and rising, the money available for your benefits keeps dropping and dropping. Further, as of June 2016, the coverage period will be cut in half from the current 10 years to a mere 5 years.

Now You See Me. Now You Don’t.

It’s not that the extra coverage isn’t available. It’s that you must now pay more for it, as more of your benefits – and their duration – become “optional.”

Insurance companies love the optional stuff. “Hey, we didn’t remove coverage. We just wanted you to decide for yourself if you really need it.” How would a regular consumer know that? Experience has shown me that these options are rarely purchased and most consumers do not know that they even exist, let alone that the coverage might change on some arbitrary future date.

Indeed, the average person who purchases car insurance does not know that their benefits are ever-changing. Ask five of your friends if any of them had heard that the standard benefits I listed above will be cut by over twenty grand next year. I’d be floored if any of them had.

That’s part of the problem. Neither the insurance companies nor the government throw up red flags to warn consumers of car insurance changes. Well, sometimes a flag does go up, as when the government touts a plan to lower your car insurance premiums by 15%. Guess how that went?

I’ll have more on the 2016 changes in the weeks ahead. In the meantime, it is worth looking at your car insurance policy and asking questions not only of your insurance representative, but also your MPP. Ask them how your policy will change next year and why. The answers may amuse you and frighten you in equal amounts.