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Ontario Drivers – The Carpet has been pulled out from underneath us

I have to confide, it has taken a few weeks for me to calm down so I could write this blog post. My instant reaction was outrage. I know however that “rage writing” is neither compelling nor objective. So I took some time before writing this blog post so I could approach it as calmly as possible. I am not here to point fingers or lay blame. I am here to tell it like it is. My goal is to tell a story and impart some advice on how we can protect ourselves and our children.

Why? Because the carpet has been pulled out from underneath Ontario drivers and their children. Our standard car insurance benefits are going to be slashed. The bottom line will be that unless we take positive steps we will be at serious risk.

What Happened?

What happened is the Ontario government announced it will slash car insurance benefits to the most seriously injured population by $1,000,000 as part of its recent budget. No that wasn’t a typo. The plan is to cut standard car insurance benefits coverage available to catastrophically injured people by one million dollars. It will be the most significant cut in benefits, the most significant change in car insurance laws, in the last 20 years.

Likewise, benefits will also be slashed for less seriously injured individuals, definitions will be re-written to exclude more people from qualifying and the duration of benefits will be reduced.

Despite this, the only headlines I read when the budget was announced were about insurers reducing premiums if drivers installed snow tires.

Why did it Happen?

This happened because insurance premiums are King. There is a great deal of public pressure on the Ontario government to reduce car insurance premiums.  Everyone, wants to pay less for car insurance.

Insurance companies however carry the hammer. Insurers control what we pay for car insurance. Our government requires that we insure our vehicles but insurance companies control how much we pay.

There is a constant debate between government, insurers and organizations supporting the injured. Insurers argue that they aren’t making enough money and to reduce the cost of car insurance premiums they have to pay out less money. So insurers say, Mr./Mrs. Politician, why not make this a win win?  Lets cut benefits, then premiums will be lowered, you can have an up tick in your popularity and we can make more money. How do we sell this to the public? By telling them their premiums are going down and we are giving them “choice”.  That is, they can always choose buy more coverage if they want.

Its a good plan from their perspective because unless you or your family are hurt in a car crash, you may not even realize your benefits have been cut when you receive your next complicated car insurance renewal form from your insurer. Their hope will be that the Ontario public will be  happy. Monthly premiums will be reduced and the cut in coverage will be overlooked. Besides, only 49% of the eligible population casts a ballot in an election. How many of them will have been hurt in a car accident who might vote against us? Compare that to the individuals who will vote for us because they have never been in an accident and their premiums were reduced.

So what’s the Problem?

Here’s the problem.  I am all for reducing premiums just like the next guy but, not at the expense of slashing my benefits by $1,000,000 and making other drastic cuts in coverage.

As for the cost of premiums I question whether the money insurers save by slashing benefits will ever trickle down to us by way of significant reduction in the cost of our car insurance premiums. I question whether the savings will simply line the pockets of insurers.

What will be the Fallout?

These cuts as a whole will negatively affect a significant percentage of injured individuals. Injured individuals will quickly run out of  money to pay for their rehabilitation following serious injury. But, who will it affect the most?  Seriously injured individuals and in particular children. Yes, if we judge our society by how we treat our most vulnerable these cuts are a miserable failure.

Why will seriously injured children be the worst affected? Because when a child is injured (compared to an adult) and in need of care, their care costs may extend for 70-80 years. For seriously injured children, every single penny counts because their significant needs extend for such a long period of time. This is not to suggest that most catastrophically injured individuals will not be hurt by these cuts. They will. It’s just that our kids will be hurt the most.

How Can we Protect Ourselves and Out Children?

If you take away anything from this blog post here is the key. When this law comes into effect, purchase optional car insurance benefits coverage. We protect ourselves and our children by ensuring our coverage is adequate if, God forbid, we or our children are hurt in a car accident.

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