Accident Benefits in Ontario
What are Accident Benefits?
Accident Benefits are an important part of the standard Ontario automobile policy. Accident Benefits, or AB, compensate drivers and/or passengers when they are injured in an accident and is one of the mandatory coverages that must be in place whenever a vehicle is being driven.
This coverage is very important. AB ensures anyone injured in a car accident has quick and reliable access to cover the resulting medical costs and lost income. We strongly recommend that you take a few moments to look over the base coverage offered, as well as the available options, and decide the coverage that’s right for you.
You may also contact your broker for more information.
Base Coverages and Upgrade Options
Income Replacement
Replacement of gross income for lost income due to an auto accident if there is no other income insurance elsewhere (eg. at work or private)
What’s included: $400 per week or 70% of your income, whichever is less
Upgrade available: If you make more than $30,000/year, it is a good idea to increase this benefit to $600, $800 or even $1000 per week.
Medical, Rehab, and Attendant Care
Covers the costs of your medical and rehabilitation that is not covered by OHIP or your group insurance. Attendant care covers the cost to hire someone to take care of you at home or in a medical facility
What’s included: $65,000 total for Medical, Rehabilitation, and Attendant Care (non-catastrophic injuries); $1,000,000 total (catastrophic injuries)
Upgrades available: Increase to $130,000 or $1,000,000 for non-catastrophic injuries; increase to $2,000,000 or $3,000,000 total for catastrophic injuries
Housekeeping and Home Maintenance
Reimbursement to hire someone to carry out your household duties (eg. cleaning, laundry, grass cutting, repairs, etc.)
What’s included: Up to $100 per week (catastrophic injuries only) to cover expenses for someone to carry out your household responsibilities
Upgrade available: Extend benefit to cover serious and minor injuries (not just catastrophic)
Caregiver Benefit
Covers the costs to hire someone to take care of your dependents
What’s included: Reimbursement to hire someone to care for your dependents. Up to $250/week for first dependent, $50/week for additional (catastrophic injuries only)
Upgrade available: Extend benefit to cover serious and minor injuries (not just catastrophic)
Indexation
This covers the adjustment of your benefits to account for changes in inflation
Not included as a standard benefit.
Upgrade available: Annual adjustment of benefits according to the Consumer Price Index of Canada
Death and Funeral
Pays lump sum in the event of death resulting from an automobile accident. Also covers the cost of the funeral
What’s included: A lump sum payment of $25,000 to your spouse and $10,000 to each dependent, and up to $6,000 for funeral expenses
Upgrade available: Increase payment to $50,000 for your spouse and $20,000 for each dependent, and increase funeral expenses to $8,000
Dependent Care
Reimbursement for additional expenses to care for your dependents if you’re employed and injured in a car accident
Not included as a standard benefit.
Upgrade available: Reimbursement for additional expenses to care for your defendants; up to $75/week for first dependent and $25/week for each additional
Tort Deductible
There is a deductible amount subtracted from a settlement of court award for pain and suffering
What’s included: $46,053.20 deducted from a settlement or court award
Upgrade available (OPCF 48): Reduce deductible by $10,000 regardless of annual indexation
Types of Injuries
- Minor Injuries: Sprains, strains, whiplash, abrasions, contusions, lacerations, or dislocation
- Catastrophic: A lifelong impairment such as paraplegia or quadriplegia, loss of two or more limbs, total loss of vision (both eyes), or major brain dysfunction
- Non-catastrophic: If your injury is not considered minor or catastrophic, it is non-catastrophic
Staebler Suggests
We have compiled a few scenarios to illustrate the importance of accident benefits. Everyone’s situation is unique and speaking to your broker is the best way to find a solution for you.
STUDENT
A student has a lot to lose as their whole life is ahead of them. Since they are likely unemployed or have only part time work, they may not have benefits through an employer.
What we recommend: Indexation, medical and rehab and attendant care package
SINGLE, WORKING PERSON with no dependents
For younger people relying on their own income or benefits, they may have a shortfall. Do they make more than $30,000. a year?
What we recommend: Indexation, income replacement, medical and rehab and attendant care package, housekeeping & home maintenance
SINGLE, RETIRED PERSON
This individual has no income to protect, no dependents or any support from a partner. Due to their life expectancy, most likely wouldn’t require indexation depending on their age of retirement. Depending upon their own financial stability, coverage may or may not be required.
What we recommend: Medical and rehab and attendant care package, housekeeping and home maintenance
MARRIED, WORKING COUPLE with/without dependents
This group of people have dependents, income and assets to protect. This includes one partner working while the other stays at home without any income. Do either of them make more than $30,000. a year?
What we recommend: Indexation, income replacement, medical and rehab and attendant care package, housekeeping & home maintenance. Where one partner cares for dependents at home, we also recommend caregiver coverage.
MARRIED, RETIRED COUPLE
These individuals no longer have income to protect but they most likely rely heavily on each other for support. Due to their life expectancy, most likely wouldn’t require indexation depending on their age of retirement. These individuals are encouraged to review their financial stability.
What we recommend: Medical and rehab and attendant care package, housekeeping and home maintenance
Why are Accident Benefits Mandatory?
Before there were Accident Benefits, automobile insurance policies relied on Liability coverage to handle cases where a driver was at fault and caused injuries to a third party. That means, so long as you weren’t at fault in an accident, your injuries could be covered by the Liability insurance of the responsible driver.
There were two major problems with that approach:
- There was no coverage provided at all if the at-fault party themselves were injured. This meant potentially having to cover significant medical expense personally
- Due to a crowded legal system, it could take many months, or even years, before the not-at-fault parties were able to recover payment from the responsible driver – all the while, having to cover potentially significant medical costs themselves
Ultimately, the real problem with this approach was that people were being stuck with taking on significant personal financial burden as a result of their injuries. Accident Benefits seeks to correct these problems by having people get coverage through their own insurance policy.
Ontario has enjoyed some form of Accident Benefits since 1990 (with the creation of the Ontario Motorist Protection Plan). Since then, Accident Benefits have undergone several changes and versions in an effort to provide adequate benefits, give the consumer choice, and keep the automobile insurance product affordable.
Speak with a Staebler Broker to ensure you’re properly covered with Accident Benefits.
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