Ontario auto insurance SABS opt-in requirements spark controversy

• Ontario's Statutory Accident Benefits Schedule (SABS) was overhauled on July 1, turning previously standard benefits into optional add-ons.
• Drivers must now opt-in to new policies and pay extra for income replacement and caregiver expenses.
• The changes restrict access to these benefits compared to before when injured parties could claim against another policyholder's insurer.
• Personal injury firms are expediting solutions, such as getting to a lawsuit quickly and pursuing advance payments from defendants.
• Litigation loans may become more common for clients who cannot afford to go without a paycheck or cover expenses out-of-pocket.

On July 1, Ontario's Statutory Accident Benefits Schedule (SABS) underwent significant changes. The amendments turned previously standard benefits into optional add-ons, requiring drivers to opt-in to new policies and pay extra for income replacement and caregiver expenses. This change affects the policyholder, their spouse, dependants, or listed drivers, restricting access to these benefits compared to before when injured parties could claim against another policyholder's insurer.

The changes also introduced a narrower scope of coverage, limiting who can claim optional benefits. Personal injury firms are now expediting solutions, such as getting to a lawsuit quickly and pursuing advance payments from defendants to cover initial costs. Litigation loans may become more common for clients who cannot afford to go without a paycheck or cover expenses out-of-pocket.

The overhaul of the SABS has created a gap in what people were able to claim before versus after these changes, depending on whether optional benefits were opted into.

The amendments to the SABS are part of a broader effort to reform Ontario's auto insurance system. The changes aim to reduce costs and make the system more efficient, but they also introduce new complexities for policyholders and injured parties.

The income replacement benefit (IRB) is a key example of how the changes will impact people. Historically, IRBs have been a crucial source of financial support for individuals after an accident, allowing them to stabilize their finances while recovering. However, with the introduction of optional benefits, many policyholders may no longer have access to this safety net.

Short- or long-term disability policies, employment insurance sickness benefits, or Canada Pension Plan benefits will need to fill the void, assuming the person qualifies. Someone who is not a traditional employee or whose employer never paid into the program may not qualify for these alternatives.

The changes to the SABS have significant implications for policyholders and injured parties. Lawyers are now advising clients to review their existing auto insurance policies and opt-in to optional benefits, such as income replacement and caregiver expenses, before July 1.

Failure to do so may result in losing access to these benefits in the event of an accident. The changes also highlight the importance of understanding what is covered and what is not under a policy, particularly with the introduction of new complexities and restrictions.

As Brandon Pedersen notes, 'Our job is to prevent financial free fall and any hindrance to the client's medical recovery.' With the SABS overhaul, lawyers must now think creatively about alternative solutions and get applications in for whatever can provide financing to clients as soon as possible.

Lawyers should advise clients to review their existing auto insurance policies and opt-in to optional benefits, such as income replacement and caregiver expenses, before July 1, or risk losing access to these benefits in the event of an accident.

Source: Original reporting via Law Times Canada