Should accident benefits for minor injuries be optional?

Should greater choice in auto insurance for Ontario motorists include the ability of insureds to opt out of benefits for minor injuries?

David Marshall, a special advisor to Finance Minister Charles Sousa, has questioned whether accident benefits should cover minor injuries. But at least one prominent broker thinks the idea of opting out of accident benefits for minor injuries could be detrimental to drivers’ health.

“Should the government insist on coverage for catastrophic injuries and allow consumers to buy coverage for less serious injuries if they want to?” Marshall queried in his April 2017 report, Fair Benefits Fairly Delivered: A Review of the Auto Insurance System in Ontario. He did not go so far as to recommend that accident benefits be optional.

But the former CEO of the Workplace Safety Insurance Board did note that Ontario auto insurance law stipulates that auto insurers are second payors. In other words, claimants who have health benefits through their workplace must first use up their workplace benefits before their auto insurer pays.

“There are several drivers who, due to their youth or other circumstances, would like to carry less insurance than the standard policy,” Marshall noted. “After protecting others through a minimum liability insurance, a sensible system of consumer choice whereby a person may consciously take less auto insurance and save money should be explored.”

However, employee health plans tend to provide “very basic” medical and rehabilitation benefits, cautioned Rick Orr, owner and account executive at Stratford-based Orr Insurance Brokers Inc. For example, some employee health plans have a $1,000 ceiling on physiotherapy. If the government were to make accident benefits optional, motorists “who could least afford it” would be the first to forgo accident benefits in order to save a few hundred dollars a year, said Orr, who served as president of the Insurance Brokers Association of Ontario (IBAO) in 2012.

Ontario vehicle owners must buy both third-party liability insurance and first-party accident benefits.

The goal of accident benefits “is to provide a guaranteed safety net for those injured in auto accidents,” Marshall wrote in 2017. But the province has “outsourced” this safety net to insurers “without giving them the authority to decide how to deliver it,” Marshall wrote. “There is a legitimate question as to how far the safety net should extend.”