No-Fault Insurance and the Right to Sue
Under Ontario’s no-fault insurance system, many people assume “no-fault” means no one is at fault in a car crash. But Ontario’s hybrid no-fault system actually means that you have access to a package of benefits, regardless of fault, while still having the right to sue an at-fault party.
Don’t expect a compensation windfall
U.S television shows leave viewers with the impression that they could receive a huge multi-million-dollar settlement if injured by someone else in a car accident. However, in Ontario, you’re lucky to get enough compensation to cover your expenses.
Benefits steadily eroded by the insurance companies
Statutory Accident Benefits are benefits you are entitled to receive if you are injured in an auto accident, regardless of who is at fault.
Benefits have been gradually reduced since 1990, and in 2016 they were reduced yet again.
For Non-Catastrophic Injuries, Medical and Rehabilitation and Attendant Care have been combined and reduced from $86,000 to $65,000.
For Catastrophic Injuries, Medical and Rehabilitation and Attendant Care are combined and reduced from $2 million to $1 million. A catastrophic injury would be a severe injury to the brain, spinal cord, or a significant psychological injury that prevents one from returning to a normal life.
Catherine Shearer, a personal injury lawyer at McKenzie Lake Lawyers in Guelph is concerned that under the current compensation system, injury victims will run out of money. “It’s very difficult for someone who has sustained a catastrophic impairment to be fairly compensated with those kinds of reductions.”
$1 Million is not nearly enough
Most who have sustained a catastrophic impairment are going to need 24/7 attendant care.
The Accident Benefits caps what they will pay a personal support worker. Shearer said, “The family will incur the cost of paying someone or quit their job to be entitled to that benefit. If you’re 45 years old and need care for the rest of your life, $1 million is not enough.”
A difficult threshold to meet
On the one hand, accident benefits are provided by your own insurance company and cover items such as income replacement and medical and rehabilitation costs. On the other hand, you also have the right to sue, given you can jump the hurdles first.
Shearer points out that, “In order to sue for pain and suffering, even if somebody is at fault, your injuries must meet the threshold of serious and permanent impairment.”
The injuries must impact your ability to go to work, get an education, or impede everyday activities. Take the example of a line worker who broke both legs in a car crash. After extensive rehabilitation he’s able to go back to work doing the same job and is pain free. In this case, he won’t meet the injury threshold and does not have the right to sue for most types of compensation.
How do you protect your right to sue?
Catherine Shearer said, “The safe and prudent thing to do is to commence an action to protect your rights, because you only have two years to file a lawsuit. However, until you have reached your maximum medical recovery, there’s always a chance that your injuries may not meet the threshold, which puts you at risk of adverse costs.”
An injury lawyer can help you balance these competing risks and determine if it is in your best interest to proceed with the court action. When talking about your rights to future compensation, Shearer said, “It’s important to move swiftly, to protect those rights because the case does have a limitation and the court system is extremely backlogged.” This is very important if your livelihood is at stake.
Hurdles you need to jump
To be successful in a lawsuit for pain and suffering, your injuries must surpass a serious and permanent threshold. If you are able to meet that threshold, then your damages for pain and suffering are not only capped, but subject to a deductible that is currently $41,503.50 and climbs each year with inflation. This is money that the insurance company simply doesn’t have to pay. For example, if you were awarded $80,000 for pain and suffering, the insurer would only have to pay you $38,496.50.
Items covered in a lawsuit include, pain and suffering, 70% of your gross income before trial, future income losses, housekeeping, out-of-pocket expenses, and any future care costs not covered by our accident benefits. A resolution could take years.
Under the no-fault accident benefits, to be entitled to income replacement of $400 a week, (it used to be $1,000) you must be employed prior to the accident. If you were not employed, there is a non-earner benefit which has been drastically reduced in the recent amendments. The caregiver benefit exists if you are a primary caregiver to someone else. The benefit used to be available to anyone but is now only applicable to those who have sustained a catastrophic impairment.
Medical and rehabilitation benefits are available to anybody injured in a car accident, however, there are different levels of benefits for minor, non-minor and catastrophic injuries.
If you’re in a car accident, you should apply for accident benefits and start treatment immediately. Under the legislation you have 7 days to notify your insurer of your intention to apply for benefits.
Before you are injured in a car accident
Discuss with your insurance broker what your needs are and what would happen if one of both income earners were incapacitated
Ask yourself important questions.
- Do you have enough coverage under your standard auto policy?
- Should you buy additional optional benefits?
- Do you have access to collateral benefits for short or long-term disability?
- If you’re a higher income earner, does it make sense to increase your income replacement from $400 to $1,000 a week?
Catherine Shearer has talked to many injured clients who are under-insured, and don’t realize it until the worst has happened.
A Power of Attorney will save you huge headaches
A power of attorney is something most people don’t think about until it’s too late. If you’ve suffered a traumatic brain injury and can’t make critical medical decisions, manage money, or instruct legal counsel, you will need a legal document that provides someone else to make those decisions on your behalf.
Shearer said, “Having somebody already appointed as the power of attorney is going to save a lot of time and money. If there is nobody in that role, they will have to be court appointed. There is a guardianship application that must be brought to court for approval that can cost additional time and money.”
Never thought it would happen to us
If the worst does happen, you should get appropriate medical attention right away, even if you think you’re okay. This is where a personal injury lawyer can help.
Shearer said, “A personal injury lawyer can ensure you have a proper care team in place, a team familiar with the accident benefits schedule and the laborious amount of paperwork involved in making a claim.” This is something that is often overlooked. If you rely on other care providers, important items or treatment may be missed.
A personal injury lawyer will help you navigate the path to recovery and ensure that a lengthy lawsuit is avoided.
Contact Catherine Shearer at (226) 203-1243 or Email: [email protected]
