This is the third entry in our Accidents Benefits series. You can find the first entry here where we discuss the basic changes the Provincial Government made to the accident benefits portion of Ontario auto policies during the 2016 auto reform. In the second entry, we explored the Medical, Rehabilitation & Attendant Care Benefit.
Today, we’re going to shine the spotlight on one of the optional coverages available to policyholders for purchase: the Income Replacement benefit.
WHAT DOES IT COVER?
If you are injured in an auto accident and are unable to work, the Income Replacement benefit provides coverage for a regular weekly income starting one week after the accident. The benefit payout is 70% of your gross income up to a maximum of $400 per week.
WHAT ARE YOUR OPTIONS?
Policyholders have the option to increase their weekly maximum to $600, $800, or $1,000 per week. Keep in mind that, regardless of the limit you select, the amount you receive will always be 70% of your gross income up to the weekly maximum you have selected.
This is a very important coverage option everyone should explore, especially those who:
- are self-employed
- have no benefits through work or other associations
- make over $30,000 per year
All policyholders should review and re-asses this coverage on an annual basis. A lot can happen in a year: a promotion, a new job, starting your own business. Your auto policy’s limits and coverages need to be reviewed and updated as your lifestyle changes.
Contact your broker today to review your current limits and go over the other coverage options available to you. Don’t wait until you’ve had an accident to find out you don’t have the coverage you need.
In June of 2016, the Government of Ontario implemented an auto insurance reform of which all policyholders should be aware. This reform changes the way your policy responds when it comes to accident benefits claims.
What are Accident Benefits?
If you’ve been injured in an auto accident, regardless of who is at fault, the accident benefits portion of your policy will cover expenses not covered by OHIP such as rehabilitation, caregiving and loss of income.
What Changed on June 1, 2016?
First, the government has decreased the amount insurance companies can payout in the event of a loss. For example, prior to June 2016, the limits for Medical, Rehabilitation & Attendant Care for non-catastrophic injuries were as follows:
- Medical & Rehabilitation = $50,000 limit
- Attendant Care = $36,000 limit
The June 2016 auto reform saw these two limits combined into one lower lump sum:
- Medical, Rehabilitation & Attendant Care = $65,000 limit
Second, the government has narrowed the definition of a catastrophic injury and changed the guidelines for how doctors classify head injuries. This means it’s more difficult to be classified as a catastrophic injury and therefore harder to access the greater catastrophic injury limits, especially when it comes to head injuries.
What Should You Do Now?
The good news is there are now several optional accident benefits coverages that policyholders can purchase in order to off-set the changes made by our Federal Government. Over the next several posts, we’ll be exploring some of the different benefits available for purchase. You can also get more information by visiting our 2016 Auto Reform Information page here: http://lomonteandcollings.ca/2016-auto-reform-information/
In the meantime, it’s important to contact your insurance broker today to review your current accident benefits coverage. Don’t wait until you’ve had an accident to find out you don’t have the coverage you need.
Who doesn’t want a lower auto premium? Here are five tips to keep your premiums as low as possible without sacrificing important coverages.
- Ask about special discounts
Do you have winter tires on your vehicle? How about a theft prevention device? These details can add up to significant savings. Be sure to ask your broker about any special discounts or programs to maximize your savings
- Bundle up!
Many companies offer a multi-policy discount for clients who place their property and auto insurance with the same insurer. This can save you up to 15% off your premium. When getting a quote, be sure to advise your broker of any property policies you have as this can impact your quote.
- Shop around
When your renewal lands in your mailbox this year, don’t be afraid to find out what other brokers have to offer. The insurance market is always changing and what was a good price five years ago may not be so hot today. Contact brokers in your area to see what each can offer. You may find a lower price – or peace of mind that the policy you have is the right one for you
- Stay collision and conviction-free
This is the most important tip of all. Careful driving habits are the most effective way to keep your premiums down. Companies love to see conviction-free and collision-free drivers, so much so, that many offer conviction free and good driving discounts.
- Ask about Driving Record Protection
Obviously, accidents do happen. That’s why we’re here! But did you know that a single collision can affect your auto insurance premium for six years or more?
The Driving Record Protection endorsement is an optional coverage offered by certain companies. It is designed to protect your driving record if you do find yourself in an at-fault collision. This means the good rate you’ve earned over the years is kept intact and you can breathe easy knowing your premium won’t fly through the roof on the next renewal.
Contact your broker today to find out if you’re eligible for this endorsement.
A common question we get from our clients is: how is my insurance premium calculated?
Insurers use a variety of information to determine what premium you pay for car insurance, but we can break it down into four general criteria:
- Your vehicle
- Driver information
- Where you live
- Your coverages
The Vehicle You Drive
The year, make, model and safety features of your vehicle all help determine the premium you pay because different vehicles represent different levels exposure. For example, a four door sedan is less likely to be stolen than a two door sedan. Also, vehicles with additional features such as anti-lock brakes are less likely to be involved in an accident than vehicles without anti-lock brakes.
Your age, gender, driver’s license level and driver history all matter because insurers use statistical data to determine the likely hood of an accident. Drivers are grouped based on same characteristics such as age, gender and driving record history. For example, a driver who has been driving for 10+ years with no accidents is statistically less likely to have a collision than a brand new driver holding only a G2 license.
Where You Live
If you’re in a densely populated area like Toronto, theft and collisions are much more likely to occur. This means potentially higher premiums for city dwellers versus those that live in the countryside.
Your Level of Coverage
Aside from the mandatory coverages such as basic accident benefits and third party liability, there are also a variety of optional coverages you can purchase to protect both you and your vehicle. These include the new increased optional accident benefits coverages as well as physical damage coverages for your car such as collision, comprehensive, specified perils, and all perils.
While some of these factors may be beyond your control, careful driving and staying collision and conviction-free are sure fire ways to keep your premium low.