Optional Statutory Accident Benefits – What You Need To Know
It has been more than 4 years since accident benefit of auto insurance policy changed in Ontario.
Some benefits which were offered by standard auto insurance policy can now be purchased as optional benefits.
$400 weekly income is provided to income earner in the standard auto insurance policy in the event of an injury due to auto accident. Income benefit is 70% of your gross income with $400 per week standard policy limit. You can purchase additional income benefit of $600, $800 or $1000/week by paying additional premium. You must know that your income replacement benefit is based on earned income. You must qualify for the benefits. . Many consumers are confused by thinking that, if a $1,000 per week benefit has been purchased, $1,000 per week will be paid following a devastating accident. If your income is $2500/month prior to injury in auto accident, you will not get paid $4000/month even if you have been paying premium for $4000/month. It will be better for having discussion with your broker regarding what will be the appropriate amount for you to purchase.
You also should take into consideration the other disability insurance policies- private or with employer you may have. Insurers will reduce the amount of income benefit for the same amount which you receive from other insurance plans. High income earner should also be careful when paying for additional benefit as they may have good long term disability plan at work. All family members should look in all the insurance policies they have and then only buy additional income replacement amount of insurance from auto insurance plan.
OPTIONAL CAREGIVER BENEFIT
Caregiver benefits used to be part of the standard policy prior to September 1,2010. Now insurer offers these benefits as optional benefits at additional cost.
$250/month caregiver benefit for the first dependant and $50/month for each additional member for whom care was provided by the caregiver prior to the auto accident can be purchased as an optional benefit by paying additional premium.(you can choose caregiver benefit or Income benefit – not both). This benefit is available in new plan in Ontario only for Catastrophic injury (definition of this is very strict and hard to qualify for minor injuries in auto accident)
You can purchase caregiver benefit in the amount of $250 for the first dependant and $50 per month for additional dependent for all injuries.
OPTIONAL DEPENDANT CARE BENEFIT
Caregiver benefit is available only as optional benefit for victims to have someone else to provide care to your family. Dependent care benefit is for working parents whose personal injuries are severe enough that they cannot care for their dependent children. This helps to pay extra child care cost.
This benefit pays $75/week for the first dependent and $25/week for each additional dependant to a maximum $150/week.
Qualifying condition for this benefits are:
1 Sustanined and impairment in an auto accident
2 Individual at the time of the accident was employe
3 Not claiming caregiver benefit
HOUSEKEEPING AND HOME MAINTENANCE
Standard auto insurance policy before September 10,2015, used to provide $100 per week for housekeeping cost if you suffer an injury in car accident and was not able to perform your regular house work and you have housekeeping assistance. This benefit was provided for two years and will continue in case of catastrophic injury. This benefit has been taken off the auto insurance.
Effective September 10, 2015, this benefit is only provided in catastrophic injury. You have an option to purchase housekeeping and maintenance benefit from your auto insurer with extra payment for all injuries. Benefit is limited for 104 weeks and will pay only $100/week
MEDICAL AND REHABILITATION BENEFIT
Effective September 1, 2010, Insurance benefit limit for medical and rehabilitation cost is $50,000 including assessment cost and $36,000 for attendant care benefit in case injury in auto accident is not catastrophic.
In the event of catastrophic injury, medical and rehabilitation benefit is increased to one million including assessment cost and additional attendant care benefit is also increased to $1,000,000
Additional optional benefit can be purchase by paying additional premium. You can increase for another $1,000,000 for rehabilitation and attendant care benefit. There is no time limit for this maximum amount of $2,000,000. Two million is the life time cap in the event that person suffers a catastrophic impairment.
Minor injury benefit is restricted to $3500 and you cannot buy any additional amount in this category..
OPTIONAL ATTENDANT CARE BENEFIT
As at September 1, 2010, attendant care coverage was cut in half to $36,000. For an additional premium, coverage of $72,000 can be purchased. For a further premium, consumers can purchase an optional attendant care benefit which would provide for up to $1,072,000 in lifetime attendant care, in the event that the person did not have a catastrophic impairment, or up to $2 million if the insured person sustained a catastrophic impairment. These optional benefits can have a tremendous additional value in the event that the most serious of accidents has occurred, often for a relatively modest additional premium cost, but, of course, one always needs to go through the numbers with an experienced insurance broker or agent.
OPTIONAL INDEXATION BENEFIT
The optional indexation benefit indexes the benefits described above, such that they are not fixed or capped at the amounts otherwise specified. For example, a $1,000 optional income replacement benefit would be increased annually according to the indexation provisions, such that it would rise over time, perhaps to something significantly more than $1,000 per week. The indexation calculations are complicated and cannot be reproduced in this short blog. This is an area where a great deal of confusion could arise, even on the part of insurance brokers and agents who might not appreciate the effect that a failure to index a benefit might have on the value of the future stream of a necessary statutory accident benefit.
OPTIONAL DEATH AND FUNERAL BENEFITS
If someone is killed in an automobile accident, the existing death benefit pays $25,000 to the insured person’s spouse and $10,000 to each of the insured person’s dependants. It is possible to double those amounts, to $50,000 and $20,000 respectively, by purchasing an optional death and funeral benefit. This is one of the lowest cost add-ons that can be purchased, and, as outlined below, the most popular optional benefit.
To have personalized coverage based on your personal need you can contact our office at (905)568-1676