There is a close relationship between the government and private insurance companies and this relationship has significant implications not only for individual claimants but also for society.
On one level the government plays an important role in regulating the relationship between insurance companies and individual policyholders. The government has a role to play not only in setting requirements for individuals to have insurance in place (i.e. such as prescribing insurance requirements for owners and operators of motor vehicles) but also to govern the relationship between policyholders and their insurers. The government takes initiative in providing consumers with basic entitlements to insurance benefits from their insurers and in determining how individuals will resolve their disputes with their own insurers. These requirements ultimately impact the profitability of the private insurer.
Therefore the months leading up to an election provide a fertile ground for negotiations between the government of the day and private insurers to try and get changes implemented to further their respective goals. The insurers want to ensure continued profitability especially in an environment where they are exposed to great uncertainty caused by property damages exceeding reserves due to unpredictable weather caused by climate change. The government wants to try and ensure stability with respect to consumer premiums and provide basic guarantees with respect to entitlements available to consumers through policies of insurance in the event of a claim.
It is one thing for a government to promise the voters a reduction in premiums and fail to deliver. It is entirely another if the government of the day is faced with the prospect of advising the electorate that they will face an increased cost in terms of their insurance premiums. Due to the fact that insurance premiums represent a significant cost to annual family budgets, this is an especially unpalatable prospect.
At this time Ontario automobile insurers are saddled with an accident benefit regime which is for a variety of reasons very expensive to deliver. Currently, the benefit scheme entrenches the right of the insurer to have their own doctor scrutinize every treatment plan submitted by an insurer above the $3,500 Minor Injury Guideline allowance to determine if it is reasonable and necessary. This is by definition, is an expensive and time-consuming process. It is in part the burdens associated with assessing treatment plans that bring insurers to the table to offer claimants cash settlements to resolve their obligations.
Cash settlements are an effective tool in allowing claimants to access treatments they require to assist them in making a reasonable recovery from the injuries they sustained in the accident. With a cash settlement to use for treatments the claimant is essentially in control over obtaining his or her treatment. They can use treatment providers of their choice and obtain treatment at a frequency they desire without having their treatment interrupted while they wait for insurer approval of treatment plans. Further and most importantly they no longer need to attend for insurer exams, a process which is both time consuming and demeaning. Many claimants express dissatisfaction with the insurer examination process which they feel unfairly represents their impairments and denies their access to treatment without valid cause.
There seems to be little disagreement that the accident benefit regime is not working. The more difficult question is how to reform it. There has been extensive media exposure pointing the finger at lawyers who represent claimants and the doctors who do the independent medical assessments. This is a prelude to call from eliminating the roles of both lawyers who represent claimants and medical professionals who do assessments for insurers, but the question remains how eliminating these players will serve the interests of accident victims.
There is talk of making the accident benefit regime more like the Workers Safety Insurance Board regime. This will mean that it will be increasingly difficult for claimants to access representation in the event they do not agree with how their claim for benefits is being handled by the insurer. If we make changes we have to be sure that the changes will first and foremost serve the interests of the persons injured in accidents. Without access to counsel in these matters (which will effectively be ended if there are no cash settlements) there will be no way to ensure a fair playing field between individual claimants and corporate insurer interest.
In terms of reform, the most important step (in my opinion) is consumer education. This should start at the broker level and consumers should be aware before they are in an accident what benefits they will be entitled to and the process for accessing these benefits. This will assist them in making decisions about purchasing optional benefits and also determining that they have the right amount of liability coverage to ensure their personal assets are adequately protected in the event of an at-fault accident. Consumer education is the cornerstone of reforming motor vehicle insurance law as it must not be forgotten the consumer is the most important stakeholder in the process. With respect to the reforms that Wynne is proposing to adopt from the Marshall report, the consumer, who is arguably the most important stakeholder has had the least amount of input into the proposed changes.
As we approach the next election be very careful when you hear platforms that mention fixing the broken automobile insurance system and promise to lower insurance premiums for consumers. On first impression, these reforms sound like good things, but the proposed changes will not withstand scrutiny when it comes to ensuring individual claimants have the ability to access the treatment and benefits they need if they are injured in an accident. Take some time and speak to your own insurance broker to make sure that you know what would happen if you were injured in an accident and to ensure that you have access to all of the optional benefits should you need them. And never forget the importance for individuals in having the right to be legally represented in any dispute involving the legal system or government bureaucracy in order to ensure that the playing field is more balanced.
And keep in mind what insurance companies aren’t paying for treatment to individuals hurt in accidents is being transferred to the public purse which is already strained.
Be afraid of any changes proposed by governments that will directly or indirectly limit the individual’s ability to have legal representation.
Lisa Morell Kelly - Lisa@morellkelly.com