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Changes to the Statutory Accident Benefit Schedule Effective September 1, 2010

By: David B. Himelfarb

Statutory Accident Benefits Schedule Changes

Major changes were made to the Statutory Accident Benefit Schedule, a regulation pursuant to the Insurance Act on September 1, 2010. These changes are now in effect. These changes to the SABS are extensive both with respect to the quantum and entitlement to benefits as well as how these benefits are claimed and processed. The policy behind these changes is as always cost-driven. Insurer's believe these new measures will help combat fraud, put premium dollars into treatment rather than into assessments and will result in stability both in the product and the price. However, the price one pays is the loss of some standard benefits that have been available for years within this province and a significant loss in the availability of medical and rehabilitation benefits in non-catastrophic cases. The following points outline the key changes:

1.          For non-catastrophic cases, the medical and rehabilitation benefits are reduced to limits of $50,000 from the previous $100,000. Included in these limits are costs of assessments completed at the request of the insured.

2.          A new category called the "MIG" (Minor Injury Guideline) has been introduced into the SABS. The minor injury is a defined term under the SABS and means a sprain, strain, Whiplash Associated Disorder, contusion, abrasion, laceration or subluxation and any clinically associated sequelae. Given the broad definitions of the above noted conditions, there is real concern that major personal injury causing severe impairment will be caught in the minor injury definitions.

For example:

A sprain is defined to mean “an injury to one or more tendons or ligaments or to one or more of each, including a partial but not a complete tear.

A strain is defined to mean “an injury to one or more muscles, including a partial but not a complete tear.
We believe that insurers will advise the majority of individuals involved in auto accidents that they have sustained a “minor injury”.

If an injury falls within the Minor Injury Guideline there is a $3,500 cap placed on available medical and rehabilitation and assessment coverage.

Furthermore, if you have sustained a minor injury, there is no housekeeping, caregiving, or attendant care benefits available.

3.          If you do not sustain a catastrophic injury, you are not entitled to housekeeping or caregiving benefits unless you have purchased those benefits by way of the optional benefit coverage. These benefits are only available absent the purchase of the option for catastrophically injured individuals. We believe that the cost for these optional benefits is far too expensive for the majority of purchasers of automobile insurance in Ontario and will be declined when the policy is purchased.

4.          The definition of Catastrophic Impairment has been expanded to include: "the amputation of an arm or leg or another impairment causing the total and permanent loss of use of an arm or a leg". While it is clear when one has had an amputation of an arm or leg one would qualify as catastrophic, it is less clear as to what might constitute an impairment that causes the total and permanent loss of use of an arm or leg absent amputation.

The definition of catastrophic impairment is set out as follows:

(a)          paraplegia or quadriplegia;
(b)the amputation of an arm or leg or another impairment causing the total and permanent loss of use of an arm or a leg;
(c)          the total loss of vision in both eyes;
(d)          a score of 9 or less on the Glascow Coma Scale administered within a reasonable period of time after the accident, or a score of 2 or 3 on the Glascow Outcome Scale administered on a test more than 6 months after the accident;
(e)          an impairment or combination or impairments that, pursuant to the AMA Guidelines for evaluating permanent impairment, results in 55% or more impairment of the whole person; or
(f)          an impairment that, pursuant to the AMA Guidelines for evaluating permanent impairment, results in class 4 impairment (marked) or class 5 impairment (severe) due to mental or behavioural disorder.

5.          For a non-catastrophic case, attendant care benefits are reduced to a limit of $36,000 for the two year coverage period. However, the monthly limit remains at $3,000 per month for non-catastrophic cases despite the reduction in the overall limit to $36,000 over two years. There is an option available to buy up to the pre-existing non-CAT limits of $72,000, but, again we believe that most people will never buy the optional coverage.

6.          Income Replacement Benefits - the calculation of the income replacement benefit is now based on 70% of the insured person's gross weekly income or self-employment income rather than the previous 80% of net earnings.

7.          A new definition has been added to the SABS: Definition of the word incurred. The definition is as follows:

An expense in respect of goods and services referred to in this regulation is not incurred by an insured person unless, (i) the insured person has received the goods or services to which the expense relates; (ii) the insured person has paid the expense, has promised to pay the expense or is otherwise legally obligated to pay the expense and; (iii) the person who provided the goods or services (a) did so in the course of employment, occupation or profession in which he or she would ordinarily have been engaged, but for the accident, or (b) sustained an economic loss as a result of providing the goods or services to the insured person.

This new definition applies to all of the benefits where the SABS provide for an expense to be incurred. Most families will want their family members or close friends providing attendant care. Insurers will not want to pay for these expenses and compensate those performing the services unless they can show that they sustained an economic loss in so doing. This is going to be quite problematic and we have already seen cases where insurers are refusing to pay for attendant care provided by family in catastrophic cases.

For assistance with a personal injury or insurance claim, please email David at dhimelfarb@himprolaw.com. To be contacted immediately call 1-855-446-7765 for a free case evaluation.

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