Auto Insurance Policy 101: Mandatory and Optional Accident Benefit Coverage – Laws and Insurance Products

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Car insurance is mandatory in Ontario. The implications of not having it are many and serious. Drivers can be fined thousands of dollars, have their driver’s license suspended and their vehicle confiscated if they don’t have a valid insurance policy.

Understanding auto insurance policies, however, can be quite overwhelming. For starters, a policy has mandatory coverages (for example, liability, statutory accident benefits, property damage, and uninsured automobile coverage) and optional coverages.

If you are about to renew or purchase auto insurance in Ontario for the first time, you may want to better understand what “accident benefits” means.

Accident Benefits coverage is the part of the policy that allows an insured person injured in a motor vehicle collision to claim benefits from their own insurance company, regardless of who was at fault in the collision.

Generally, Mandatory Accident Benefits coverage includes benefits for medical, rehabilitation and attendant care, caregiver, person without income and income replacement. If purchased, Optional Benefits may increase Mandatory Accident Benefits coverage. The table below provides an overview of some important differences between the benefits of mandatory and optional Accident Benefits coverage:


















Mandatory Accident Benefits Coverage

Optional Accident Benefits Coverage


Medical, rehabilitation and attendant care benefits

Authorize requests for access to certain treatments not covered by OHIP (e.g. physiotherapy, chiropractic treatment, etc.), requests for mobility aids (e.g. wheelchairs) and requests attendant care (eg, assistance from a personal care attendant with activities of daily living).


Generally, benefit amounts are capped at $65,000 for non-catastrophic serious injuries and $1,000,000 for catastrophic injuries.


Generally, optional benefits increase the amount of claimable benefits to $130,000 for serious non-catastrophic injuries and up to $2,000,000 for catastrophic injuries. Even more benefits are available in this category.


Caregiver benefits

This benefit can be claimed by those who, at the time of the accident, were caring full-time for dependents (e.g. children and aging parents) residing with them and who, because of the collision , can no longer provide such care requiring that they hire help.


Generally, the injured person must have sustained catastrophic injuries in a motor vehicle collision to claim this benefit.


The injured person is not required to have sustained catastrophic injuries to claim this benefit.


Income replacement benefits


Generally claimable for an amount of up to $400/week.


Depending on the policy, the amount that can be claimed as income replacement benefits is up to $1,000/week.


Housekeeping and housekeeping services

This benefit covers the cost of hiring someone to perform the housekeeping and/or home maintenance duties that the injured person was performing prior to the collision.


Normally claimable only by those who, as a result of the collision, were catastrophically injured.


This benefit is not exclusive to people who have suffered catastrophic injuries in a collision.


Death and funeral benefits

This benefit can be claimed in the event of the death of the insured following a collision with a motor vehicle.


The benefit provides up to $25,000 for the eligible spouse, up to $10,000 for each eligible dependent and a maximum of $6,000 for funeral expenses.


The benefit is generally capped at $50,000 for the eligible spouse, $20,000 for each dependent and $8,000 for funeral expenses.


Indexing

This benefit provides an annual inflation adjustment to other benefits such as income replacement, non-wage compensation, medical, rehabilitation and attendant care benefits.


This benefit is not part of the Mandatory Accident Benefits policy.


This service can be contracted as an optional service.


Benefits for dependents

This benefit covers those who were employed at the time of the collision and who, as a result of the injuries sustained in the accident, had to pay additional childcare costs.


This benefit is not part of the Mandatory Accident Benefits policy.


Generally, a claim for dependent benefits can cover up to $75/week for the first dependent and $25/week for each additional dependent, up to a maximum amount of $150/week .

The variety of options available beyond the mandatory “accident benefits coverage” is significant. Which policy is most appropriate for each individual and whether it should include optional coverages is a personal choice. It is worth checking with an insurance broker how each or all of the optional benefits may impact the insurance premium and discussing whether any optional benefits would be recommended for you and your family. Insurance brokers are the licensed professionals who will help you make this decision in Ontario.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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