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Understanding the catastrophic impairment benefit limit

Apr 1, 2020 | Accident Benefits Claims, Legal Articles

Moussa Sabzehghabaei

Personal Injury Lawyer

The catastrophic impairment benefit coverage in Ontario was introduced in 1996. In that year, the benefit limit was set at $2million and was split into two. Up to 1 million was paid for medical and rehabilitation expenses and the other 1 million limits were set for attendant care benefits. However, this later changed as the sub-limits were combined into a single benefit and the total coverage was reduced to $1million.

When the change was effected, the Ontario government introduced an optional coverage that individuals could buy to qualify for more benefits. The Statutory Accident Benefits Schedule (SABS) stipulates the definition of being catastrophically injured. These are life-altering impairments such as loss of a limb or paraplegia. The amount of medical and rehabilitation costs that will be covered under an auto insurance policy for catastrophic injury cases is also clearly stipulated in the law. Individuals who purchase additional coverage may be entitled to higher monetary limits if they sustain a catastrophic injury.

Gaps in auto insurance coverage

Unfortunately, auto insurance laws are quite complex for most people. It can be difficult to know and understand how much you are entitled to when a catastrophic injury occurs. Some victims do not know what benefit options are available for them. Sometimes drivers select insufficient coverage due to changes in personal circumstances.

Catastrophic impairment has significant impacts on the victim and the affected families. While there’s an option to sue in order to get compensated above and beyond what the accident benefit limits stipulate, these lawsuits often take time and may delay the victim’s access to treatment. There’s a lot that still needs to be done to enhance consumer protection and knowledge of auto insurance benefits.

The $2million default benefit limit

There’s an amendment proposed by the government that will offer every policyholder by default a benefit limit of $2million to cater for rehabilitation, medical and attendant care benefits. This benefit will only apply to those who are catastrophically injured in a car accident. For those who want to obtain less coverage, they may have the option to reduce the default to a minimum of $1million. Some of the reasons to obtain less coverage may include when a driver has benefits available in other insurance policies such as a health care policy that’s offered at the workplace.

The decision to combine medical, rehabilitation and attendant care benefits into a single benefit was made to help accident victims have the flexibility to access the kind of care they needed and in the way that they wanted it. Furthermore, there have been no proposed changes so far to the Statutory Accident Benefits Schedule in regard to the payment rules.

By implementing the $2million catastrophic impairment default benefit, more Ontarians will have access to coverage. Accident victims can now get the treatment and care they need more quickly without having to follow lengthy legal processes. This new law is also expected to give drivers more choices about their coverage and the flexibility to apply for catastrophic impairment benefit limits to all kinds of care depending on their individual needs.