Chapter 6 - AB

Question 1

Define verbal threshold.

Answer 1

• the words or language describing the nature and type of injury that must be suffered in order to be able to commence a legal action against the responsible party

Question 2

Describe the OMPP threshold.

Answer 2

under the definition of the threshold, suits for non-pec. loss and economic loss could only be brought if the injured person had:

a) died
b) sustained PERMANENT serious disfigurement
c) sustained PERMANENT serious impairment of an important bodily function caused by continuing injury which is physical in nature

Question 3

Describe Bill 164 and SABS.

Answer 3

• effective Jan 1,1994
• created a SABS giving increased and wid-ranging benefits
• modified the threshold for lawsuits against 3rd party motorists for accidents occurring on or after that date
• legal actions were now permitted for pain and suffering only***, and only when the injured person had:
  a) died
  b) sustained SERIOUS disfigurement
  c) suffered impairment of an important physical, mental, or psychological function
• no legal suits for economic loss

Question 4

Describe Bill 59.

Answer 4

• June 1996
• Auto Insurance Rate Stability Act was passed
• included a new SABS which was modeled on original SABS but with significant variations
• legal actions were permitted in more situations
• the right to recover from a responsible 3rd party in the courts was expanded to economic losses without any requirement to meet the threshold and medical expenses if the injuries were catastrophic, subject to the provisions in the act and its regulations

Question 5

Describe Bill 198.

Answer 5

• October 2003
• amended the stat accident benefits
• legal actions were now permitted in one additional situation
• the right to recover from an at-fault 3rd party in the courts had expanded to include not just economic losses but also medical expenses subject to the verbal threshold

ECONOMIC LOSS - no threshold

• was limited to 80% of net income suffered more than 7 days after accident and up to date of trial
• post trial, recovery for future losses was calculated to 100% gross income basis

HEALTH CARE EXPENSES - verbal threshold
- med, rehab, attendant care benefits for injured persons against the at-fault driver for injuries that met a verbal threshold (as listed below)

NON-ECONOMIC LOSS (pain and suff)

• could sue provided that persons injuries met this verbal threshold
  a) death
  b) PERMANENT serious disfigurement
  c) PERMANENT serious impairment of an important physical, mental, or psychological function
• subject to a per person ded. of $36,905.40
• $18,452.70 ded. in the case of family law act claims for the loss of care, guidance, and companionship
• ded. could be increased, but not decreased by reg.

Question 6

Describe the Auto Insurance Reform.

Answer 6

• Sept 1, 2010
• was a result of the 5 year review of auto insurance
• new reg were issued that provided more cov options
• insured now have the option of selecting between different coverages for their auto insurance to meet their needs
• a new standard policy was introduced for all policies renewing on or after Sept 1, 2010
• while this policy reduces the existing SABS coverage, insureds had more options to increase limits/add optional coverages under the AB section
• standard per person ded. applicable to non-eco losses under new reg. was increased but insureds had the option of reducing the ded. through OPCF 48 (added coverages to reduce tort ded endorsement)
• right to sue was unchanged

Question 7

Define accident.

Answer 7

• an incident in which the use/operation of an auto DIRECTLY causes an impairment or damage to any prescription eyewear, denture, hearing aid, prosthesis, or other medical/dental device

Question 8

Define impairment.

Answer 8

• loss or abnormality of psychological, physiological, or anatomical structure or function
• to be entitled to income replacement benefit/other benefits or reimbursements the insured must sustain an impairment as a result of an auto accident that either disables and prevents him/her from engaging in specific activities (employment) or results in reasonable and necessary expenses being incurred (caring for dependant/for treatment)

Question 9

Define insured person - actual policy wordings.

Answer 9

Insured person in respect of a particular motor vehicle liability policy means:

a) the named insured, any person specified in the policy as a driver of the insured auto, and if the named insured is an individual, the spouse of named insured, and a dependent of named insured or his/her spouse

i) if named insured, specified driver, spouse or dependent is involved in an accident in/outside of Ont that involves the insured auto or another auto
ii) if named insured, specified driver, spouse or dependent is not involved in accident but suffers psychological/mental injury as a result of an accident in/outside Ont that results in physical injury to his/her spouse, child, grandchild, parent, grandparent, brother, sister, dependant, or spouses dependant

b) a person who is involved in an accident involving the insured auto, if the accident occurs in Ont
c) a person who is an occupant of the insured auto and who is a resident of Ont at any time during the 60 days before the accident, if the accident occurs outside Ont

Question 10

Who is the named insured for accidents in Ont?

Answer 10

Accidents involving insured auto or another auto:

i) named insured and any person specified in the policy as a driver of insured auto
ii) spouse of named insured
iii) any dependant of named insured or spouse
iiii) a person who is involved in an accident involving the insured auto

Question 11

Who is considered to be the named insured for accidents outside of Ont?

Answer 11

• a person who is an occupant of an insured auto and who is/was a resident of Ont at some point during the 60 days prior to the accident

Question 12

What does SECTION 268 (1.1) include?

Answer 12

• no stat AB are payable from any source to an occupant of a public transit vehicle if the public transit vehicle did not collide with another auto/object

Question 13

Define priority of payments.

Answer 13

• the definition only applies to spouses/dependents of the names insured
• all persons must claim AB from their own auto insurer (if person is named insured on more than 1 policy he/she may decide the insurer from which he/she will claim AB)
• if there is no such insurance (person/spouse does not own an auto) benefits are payable by the insurer of the auto in which he/she was an occupant
• if recovery cannot be had ( no insurance on auto in which person was an occupant) then recovery can be made from the insurer of any auto involved in the accident
• if no recovery is possible from any of the above 3 sources (injured person is a ped who does not own an auto and is a victim of hit and run), the benefits will be paid the the Ont Motor Vehicle Accident Claims Fund

Question 14

Define case manager.

Answer 14

• person who provides services related to the coordination of goods/services for which payment is provided by a medical, rehab, or attendant care benefit
• a claimant is eligible for case manager services only if he/she has sustained catastrophic impairment

Question 15

Define Minor Injury Guideline.

Answer 15

• represents a format to efficiently process pre-defined injuries, such as sprain/strain/whiplash associated disorder/others.
• format was designed to promptly place the injured person into treatment plan without the need for expensive/prolonged assessments
• the injured person deals with his/her own health care provider who assumes overall responsibility for pre-approved treatment available

Question 16

Define treatment and assessment plan.

Answer 16

A document prepared by a member of a health profession which includes:

• description of the impairment or resulting disability
• estimated duration of disability
• proposed goods/services
• estimated cost
• anticipated benefits
• persons who will provide them
• duration of services
• statement identifying member of a health profession who will supervise the implementation of treatment plan
• statement by health practitioner that expenses contemplated are reasonable/necessary for insured persons treatment/rehab
• under current system claimants are still required to approach own health pract. for an assessment when applying for benefits
• an insurer can review/challenge this assessment or may request a separate medical/health care exam from a health care provider of their choice
• FSCO has a dispute resolution system for disputes over assessment/exam findings
• under new reg. effective Sept 1, 2010, assessment costs are now included within the med and rehab limit, but are limited to $2000 per assessment

Question 17

Explain choice of benefits for accidents outside of Ontario. (anywhere in Canada or USA)

Answer 17

• they have a choice between the Ontario level of benefits and the no-fault benefits available in the jurisdiction where the accident occurs
• for accidents occurring in Sask/Manitoba, have substantial no-fault benefits but Ont hasn’t signed an agreement with them, by which the gov insurer agrees not to subrogate against the Ont resident for accidents in that province

Question 18

Who pays first when an insured person who is also entitled to social assistance payments?

Answer 18

• auto insurers are the first payer of benefits

Question 19

Define collateral benefits.

Answer 19

• are sources of entitlement outside of the auto policy

ex) employer plans, income continuation plans

Question 20

When are deductions permitted?

Answer 20

The insurer may deduct the following amounts in calculating the amount of weekly income replacement/non-earner benefits payable to an insured person:

1) net payments for loss of income that have been received by the insured person as a result of an accident under the laws of any jurisdiction or under any income cont. plan
2) net payments for loss of income that have not been received by the insured person but are available to insured person as a result of an accident, if the insured has not applied for them
3) any temporary disability benefits being received by the insured in respect of a period following the accident and in respect of impairment that occurred before accident
4) any other periodic benefits being received by the insured in respect of an impairment that occurred before the accident

Question 21

When are deductions not permitted?

Answer 21

• unemployment insurance benefits and payments under a sick leave plan that are available to the insured but have not been received
• although coll. sources for loss of income pay first, insurers are required to top up the loss of income paid by these sources to 70% of gross income to a max top-up of $400 per week

Question 22

Describe what happens when dealing with Workers Comp.

Answer 22

• insurer is not required to pay benefits to any person who is entitled to receive benefits from WC
• but if an employee is injured in the course of operating an auto, that same innocent employee is given legal right to take action against responsible 3rd party
• regulations provide for interim payments by auto insurer to injured worker
• auto insurer is required to pay the no-fault benefits until final resolution of tort action
• however, auto insurer will have a right to receive from the worker, an assignment to which the workers comp board has concurred, the amount paid by way of such no-fault benefits

Question 23

List the AB coverages.

Answer 23

1) income replacement benefit
2) non-earner benefit
3) caregiver benefit
4) medical, rehab, attendant care benefit
5) payment of other expenses
6) death and funeral benefits
7) optional benefits

• note: insurers must offer insureds the option to have the max benefits payable and individual or aggregate limits noted in the following sections indexed annually based on consumer price index for Canada.

Question 24

Describe income replacement benefits (IRB).

Answer 24

• an insured person who is disabled as a result of an an auto accident is entitled to a weekly income replacement benefit (IRB) if he/she meets any of the following qualifications:

1) the insured was employed at the time of the accident and as a result of and within 104 weeks of the accident, suffers a substantial inability to perform the essential tasks of that employment
2) the insured was not employed at the time of the accident however;
i) was employed for at least 26 weeks in the 52 weeks prior to accident or was receiving unemployment insurance benefits at the time of accident
ii) was at least 16 years of age or was excused from attending school under the education act
iii) as a result of and within 104 weeks of accident, suffers a substantial inability to perform the essential tasks of employment in which he/she spent the most time during the 52 weeks prior to accident

• this benefit is not payable for the first week of disability nor is it payable for more than 104 weeks of disability, unless the insured suffers a complete inability to engage in any employment for which he/she is reasonably suited by education, training, or experience
• for the first 104 weeks the amt of benefit is 70% of insureds gross weekly income from employment
• weekly max benefit is $400 unless optional IRB has been purchased (may be increased to $600, $800, or $1,000)
• after 104 weeks, if insured remains eligible he/she will receive the greater of the benefit received during the first 104 weeks and $185 per week
• income includes income from employment, self-employment and unemployment insurance benefits
• benefits will be adjusted downward starting at age 65

Question 25

Describe non-earner benefit.

Answer 25

• payable to 3 classes of insured persons. They are those who suffer a complete inability to carry on a normal life and:
  i) do not qualify for IRB
  ii) cease to receive caregiver benefits because there is no longer a person in need of care
  iii) were enrolled on a full time basis in elementary, secondary, post-sec education at the time of the accident or had completed their education less than 1 year before the accident and were not yet employed in an employment reflecting education/training
• is equal to $185 per week and is not payable for the first 4 weeks after an accident nor until person reaches age 16
• after 104 weeks have elapsed since the onset of disability, the benefit becomes equal to $320 per week
• benefit is only payable as long as the person suffers a complete inability to carry on a normal life and is adjusted downward at age 65

Question 26

Describe the caregiver benefit.

Answer 26

• insured person who sustains a catastrophic impairment as a result of an accident, within 104 weeks after the accident, the insured suffers a substantial inability to engage in the caregiving activities in which he/she was engaged at the time of accident and if at the time of accident:
  1) insured person was residing with a person in need of care
  2) insured was the primary caregiver for person in need of care and did not receive any remuneration for engaging in caregiving activities
• will pay for reasonable/necessary expenses incurred as a result of the accident in caring for a person in need of care, but shall not exceed:
  i) $250/week for expenses in caring for 1 person
  ii) plus an additional $50/week for each additional dependent
• will only be indemnified for actual expenses incurred (above are max amounts)
• benefits are payable for no longer than 104 weeks of disability, unless as a result of the accident, the insured is suffering from complete inability to carry on a normal life
• the insured may not receive benefit if he/she is receiving an IRB or non-earner benefit
• insured has the option of extending coverage to apply to situations where the claimant sustains non catastrophic injuries subject to same max time limit for an add. premium

Question 27

Describe Medical, Rehab, and Attendant care benefits.

Answer 27

MEDICAL BENEFITS
Pays for all reasonable/necessary medical expenses that are not payable under another ins plan/law
- medical, surgical, dental, optometric, hospital, nursing, ambulance, audiometric, speech language pathology services
- chiro, psychological, occupational therapy, physio
- medication
- prescription eyewear
- dentures/dental devices
- hearing aids, wheel chairs/mobility devices, prosthesis, orthotics, other assistive devices
- transportation for insured, and an aide/attendant to and from treatment sessions
- other goods/services of a medical nature that insured requires

note: transportation costs will be calculated based on a trans. expense guideline produced by FSCO. If person uses his/her own auto, no payment may be made with respect to the first 50 km per round trip to a treatment session

REHAB BENEFITS
Pays for reasonable measures to reduce/eliminate effects of any disability resulting from impairment
- social rehab including training, counseling, home mods, vehicle mods
- vocational rehab including counseling, vocational and academic training, workplace mods
- transportation to and from sessions
- other goods/services required

note: professional services guideline publishes the max amounts insurers will be required to pay for life skills training, family counseling, social rehab couns, finan. couns., employment couns., vocational assessments, vocational/academic training

CASE MANAGER BENEFITS

• pays all reasonable/necessary expenses incurred on behalf of a person sustaining catast. impairment as a result of an accident for services provided by a case manager in accordance with treatment plan
• insurers are not required to pay for services of case managers who are not accredited

ATTENDENT CARE BENEFITS
Pays for all reasonable expenses incurred by or on behalf of an insured person for:
i) services provided by an aide or attendant
ii) services provided by a long term care facility including a nursing home, home for the aged, or chronic care hospital

• max amt payable is $3000/month when injuries are classified as non-cat. and $6000/month for cata. impairment
• benefit is subject to a max limit of $36,000 for non cat. and $1M for cata. impairment

OPTIONAL DEPENDENT CARE BENEFIT

• insured has the option of purchasing benefit which pays for reasonable/necessary add. expenses incurred by or behalf of insured as a result of an accident in caring for insureds dependants, if insured:
  i) sustained an impairment as a result of an accident
  ii) was employed at the time of accident
  iii) is not receiving caregiver benefit
• amt of benefit shall not exceed $75/week for first dependant and $25/week for each add. dep. to a max amt of $150/week

Question 28

Describe Payment of other expenses.

Answer 28

a) Educational expenses
- insured who was enrolled in a program of elementary, secondary, post-sec, or cont. education who as a result of accident, is unable to continue the program will be entitled to reimbursement for reasonable expenses incurred in respect to tuition, books, equipment, room/board in respect of program term/year in which person was enrolled at time of accident
- max amt payable is $15,000

b) expenses of visitors (no max limit)
- reasonable expenses incurred in visiting injured person during treatment/recovery by a spouse, child, parent, grandchild, grandparent, bro, sis of insured will be paid
- no amts payable for expenses incurred more than 104 weeks after accident unless insured sustained cata. impairment

c) housekeeping and home maintenance expenses
- pays for reasonable/necessary add. expenses incurred on behalf of insured respecting housekeeping and home main services if because of the accident, insured sustained cata. impairment and suffers a substantial inability to carry out housekeeping and home main. servives that he/she normally performed before accident
- max repayment of $100/week from date of onset of disability
- insureds have option to extend benefit to apply when injuries/impairments are non-cat. subject to max of 104 weeks from date of onset of disability

d) damage to clothing, glasses, hearing aids, etc
- Pays for all reasonable expenses incurred by or on behalf of insured in repairing or replacing:
i) clothing owrn by insured at time of accident
ii) prescription eyewear, dentures, hearing aids, prostheses, other medical/dental devices that are lost/damaged in accident

e) cost of examination
- pays all reasonable expenses incurred in arranging and attending an exam/assess including fees for service
- also pays fees charged by person who provides treatment plan and transportation costs
- amounts payable may not exceed max amts established under professional servive schedule published by FSCO
- limited to $2000 per assessment

Question 29

Describe death and funeral benefits.

Answer 29

if an insured person dies within 180 days as a result of an auto accident or within 156 weeks if there has been continuous disability and is survived by at least 30 days by a spouse or dependant, benefits are paid as follows:

a) $25,000 will be paid to surviving spouse ($50,000 if optional benefit was purchased)
b) $10,000 to each surviving dependant and to any person to whom insured has an obligation under domestic contract/court order to support them ($20,000 for increased amt)
c) if insured is not survived by a spouse, $25,000 will be divided amongst dependants/person he/she has obligation to
d) if insured is survived by former spouse to whom he/she weas obligated to support under court order, $10,000 is payable to former spouse
e) if deceased was a dependant, $10,000 is payable to person upon whom the deceased was dependent

note: spouse refers to the person who was the spouse at the time of accident
- a max funeral benefit of $6000 is payable, but can be increased to $8,000 if opt. benefit is purchased

Question 30

Describe optional benefits.

Answer 30

The following must be made available to all insureds by every insurer that writes auto ins in Ont.

1) increased IRB
2) caregiver benefits extended to apply to non-cat claims
3) increased and extended med, rehab, and att. care benefits
4) addition of dependent care benefits
5) housekeeping and house main. expenses extended to apply to non-cat. claims
6) increased death and funeral benefits
7) annual indexation of benefits and limits based on CPI

• these may be purchased at any time before an accident
• amount of opt. benefit is available only to the named insured, any person specified in policy as a driver of insured auto, and if named insured is an individual, spouse of named insured, and any dependent of named insured/spouse

Question 31

List the exclusions in AB.

Answer 31

• not required to pay income replacement, non-earner, ed. expenses, expenses of visitors and housekeeping/home main. if:
  1) to a person who as a result of an accident, was convicted of operating auto while his/her ability to operate auto was impaired by drugs or alcohol
  2) to a person, who as a result of an accident, asked to provide a breath sample and is convicted of failure to provide sample
  3) to a person, who as the driver, knew/ought to have known that he/she was operating the auto while it was not insured under motor vehicle liab. policy
  4) to a person, who as the driver, was driving auto without valid drivers licence
  5) to a person, who as the driver, is an excluded driver under policy
  6) to person, who as the driver, knew/ought to have known that he/she was operating auto at the time of accident without owners consent

Insurer will also not pay benefits in respect of:

1) any person who has made, or who knows of, a material misrep which induced insurer to enter into contract of insurance or who intentionally failed to notify insurer of a change in the risk material to the contract
2) an occupant of an auto at the time of accident who knew/ought to have known that the driver was operating auto without consent
- does not prevent occupant of an auto driven by excluded driver from recovering AB

Question 32

Describe criminal charges.

Answer 32

• when a person is engaged, or an occupant of an auto that was being used in connection with an act for which the person is charged with a criminal offence, the insurer must hold in trust, the money payble for IRB, non-earner, ed. exp, exp. of visitors, and houskeep/house main.
• these must be paid if the person is found not guilty
• criminal offence means operating an auto which a blood alcohol concentration exceeding the legal limit, failing to comply with a lawful demand for a breath sample, or any other criminal offence, whether or not the offence is related to operation of an auto

Question 33

What occurred with the Auto Insurance Reform in 2016?

Answer 33

• eff June 1, 2016
• to help make ins premiums more affordable, benefits/covs included in the standard policy were changed again
• some benefits were reduced, and some options for increased cov were eliminated/changed
• trying to provide more limited standard AB but also providing more options for insureds to purchase increased limits or additional benefits to enchance their cov