The Real Losers in the New Auto Insurance Regime: Pedestrians, Cyclists and Children

On Monday, November 2, 2009, Dwight Duncan, the Minister of Finance, announced that the Government will be making changes in 2010 to automobile insurance in Ontario.  The new plan will see a sharp reduction in benefits available to those who are injured in car accidents.  These reductions will impact not only auto drivers who buy car insurance, but also the victims who are injured after being struck by a car, including cyclists, pedestrians, and children.

The plan is being sold by both the Government and the insurance industry as a means of lowering auto insurance premiums and bringing stability to the system.

In announcing the changes, Minister Duncan stated “We feel this is a very balanced package that will hold the line (on premiums) and give consumers more choice.”

The reduction in benefits announced by the Ministry of Finance will be launched next year.  The Government’s justification for such reductions is “consumer choice”.   Despite drastically reducing the benefits, the changes allow drivers with an automobile insurance policy to pay more to increase the amount of benefits available to themselves and their family.    Not only can drivers restore the benefits that were reduced, they can increase them.  However, this choice of added protection is not given to all Ontarians.  If you are a cyclist, pedestrian or public transit user who does not have an automobile insurance policy to “buy up” with, you and your family must simply accept the reduced benefits.  It does not matter if the person who hit you has increased her own benefits; the optional benefits only protect her if she is hurt.  The reductions are significant and include lowering medical and rehabilitation benefits from $100,000 to $50,000. Meanwhile, the driving public can buy up to $100,000 and even a $1,000,000 in added protection.

The new plan creates an injustice for persons who do not own automobile insurance and elect to travel by other modes of transportation such as bike or foot.  Many cyclists, pedestrians, and public transit users do not own vehicles and do not have car insurance policies.  They do, however, suffer serious injuries as a result of being doored, hit or struck down by a car.

Perhaps the greatest injustice of this new law falls upon children.  Parents of a child can increase their benefits to ensure added protection is given to their child if the child is struck down by a car while walking or riding his/her bike.  However, parents of a child who do not own a car and do not have car insurance, will not be able to give their child this added protection. 

If laws are to be changed, why not protect the most vulnerable first?  Let’s not forget that people who do not drive are consumers as well.  Lowering of auto insurance premiums ought not to be on the backs of the most vulnerable.

A simple change can be made.  Restore the benefits to those who can not protect themselves.

Patrick Brown

Patrick Brown

Principal Partner

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