Alliance of Community Medical and Rehabilitation Providers

Higher Profits for Auto Insurance Companies

or Protection for Accident Victims?

Ontario Finance Minister Dwight Duncan Has a Decision to Make

TORONTO, May 14 /CNW/ - The Ontario government is considering regulatory changes that will give auto insurance companies windfall profits and leave accident victims without the protection they need.

Finance Minister Dwight Duncan is now reviewing recommendations from the Financial Services Commission of Ontario (FSCO) that would, if implemented, slash basic accident benefits from $100,000 to $25,000 without any reduction in the premiums people pay for insurance. A decision is expected by the end of June.

The insurance industry is crying poor, and FSCO seems to have bought the industry's argument hook-line-and-sinker. Yet insurance companies made $2.8 billion last year. Not bad in an economic downturn said to be the worst since the Great Depression. As well, the industry had a return on equity of more than 7 per cent while the rest of us were losing 35 per cent on our investments.

"Minister Duncan has a choice to make - he can stand up to the insurance lobby and ensure that people seriously hurt in car crashes get the medical and rehabilitation services they need; or he can cave to the industry and give the insurance companies the profits they want," says Nick Gurevich, a spokesperson for the Alliance of Community Medical and Rehabilitation Providers.

"If Minister Duncan adopts the proposals, we'll still be paying the same amount or more in insurance premiums, but we'll be getting a lot less if we're injured in a car crash. A nice deal for the insurance firms; highway robbery for the nine million motorists in the province," Gurevich notes.

Each year there are some 60,000 individuals injured as a result of motor vehicle accidents in Ontario. That's approximately the population of North Bay, or Leamington, or Cornwall. Many of these people are seriously hurt, requiring months and sometimes years of rehabilitation. With only $25,000 of basic benefits, they'll run out of this coverage long before they get better.

Minister Duncan might argue that consumers will be able to purchase optional coverage. But based on past buying decisions, people typically do not 'buy up' - and the industry knows it. Most select the basic coverage to save money, and this is especially true in tough economic times.

Under the proposed new system, a maximum of only $25,000 would be available to accident victims for such serious injuries as: loss of a limb; blindness in one eye; brain injury; multiple fractures; partial paralysis; or major burns.

As well, pedestrians and cyclists who do not have their own insurance and are struck by motor vehicles will also receive only $25,000 in accident benefits if those drivers have only the basic coverage. In other words, they'll be at the mercy of decisions made by others.

As these victims quickly exhaust their benefits under the proposed new regime, they'll be thrown onto the public health system where either the services they need are unavailable or the wait times are so long that timely intervention becomes impossible. "This tidal wave of accident victims pouring into the public heath care system, which is already overburdened, will entirely overwhelm it," says Patricia Howell, an Alliance member and an occupational therapist who provides rehabilitation services to auto accident victims.

The Alliance is asking Minister Duncan to make the right choice, to take care of people before profits, to protect the consumers of this province by rejecting the FSCO recommendations and maintaining the current level of basic accident benefits.

"At a minimum, he should delay any regulatory changes and consult broadly with the public. Most people are completely unaware of these issues. They have a right to be fully informed and heard. Otherwise the government could be accused of trying to rush this through," notes Howell.

The Alliance urges consumers to contact their MPP and email Finance Minister Dwight Duncan directly at dwight.duncan(at)ontario.ca. As well, consumers can sign an online petition at www.feelinglucky.ca.

The Alliance of Community Medical & Rehabilitation Providers is a coalition of 43 organizations in Ontario providing direct clinical services to victims of motor vehicle accidents and employing physiotherapists, occupational therapists, speech language pathologists, chiropractors, social workers, psychologists, case managers and family physicians.

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