Everything You Need To Know About Accident Benefits Coverage in Ontario

Learning about accident benefits coverage in car insurance

Most of us do it at least once daily: We get in our car, start the engine and drive. Maybe we will go to work, pick up our kids, get groceries, perhaps even go on a road trip. Driving is part of our daily routine.

We often don't spend much time thinking about the risks and responsibilities we are assuming while behind the wheel.

In the vast majority of cases, we reach our destinations safely. There are times, however, when automobile accidents do occur. Thankfully, injuries and damages are minor in most accidents, such as with a fender bender. Unfortunately, however, serious motor vehicle accidents do happen, resulting in fatalities and catastrophic injuries.

Ontario law requires every driver to be licensed and each motor vehicle owner to have insurance. Ontario car insurance through an insurance provider offers coverage for four required protections: third-party liability coverage, direct compensation property damage, uninsured automobile, and accident benefits.

Accident benefits coverage is discussed in this article.

Accident benefits coverage protects those injured in accidents. This includes the insured/driver and possibly the passengers, and others, such as pedestrians or passersby. Accident benefits can include payments for caregiving, income loss, funerals, and many other expenses. For example, funeral costs in Canada can range from $1,500 to $20,000, depending on preferences. The funeral benefit paid under a standard policy with standard accident benefits is up to $6,000. With increased accident benefits, you can receive coverage of up to $8,000 for funeral expenses.

Our Morison Insurance brokers have created a piece on the types of coverage accident benefits provide, and what increased coverages are available to ensure you and your loved ones are protected in the event of an accident. 

What are accident benefits?

Accident benefits are mandatory coverage under the Ontario Auto Policy (Section 4). Accident benefits protect the insured person, their spouse, their dependants, any passengers in their vehicle and any involved pedestrians or others injured in an automobile accident.

Who needs accident benefits coverage?

Every motorist/vehicle owner in Ontario must carry auto insurance, and standard accident benefits are included in all auto insurance policies. Accident benefits coverage protects injured persons, their spouses, their dependants, and others injured during an accident, such as passengers or passersby, from financial difficulties and expenses involved with treatment, rehabilitation, and everyday living costs. There is, however, the option to increase these accident benefits coverages for additional protection should an incident occur. An insurance broker has the expertise and will walk you through all of your options to ensure you have the best coverage. 

Categories of Injuries for Accident Benefits

Before we get into the different coverages offered by accident benefits, it is important to know that accident benefits differ based on the category of injury suffered. There are three categories of injuries for accident benefits: minor injury guidelines, non-catastrophic injuries that are not minor injuries, and catastrophic injuries. 

Minor Injury Guideline (MIG) - If the injured insured person suffers sprains, strains, whiplash, contusions, abrasions, lacerations or subluxations. 

Non-Catastrophic Injuries that are non-MIG - The injured insured person has injuries outside of the Minor Injury Guideline but does not qualify as a catastrophic loss. The non-catastrophic injury category is sometimes referred to as Serious.

Catastrophic Losses - If the injured insured person suffers paraplegia, tetraplegia, severe impairment of ambulatory mobility of a limb or amputation of a limb, loss of sight, loss of hearing, brain injuries. An OCF19 Application for Catastrophic Loss form must be completed by a physician or neuropsychologist. 

What is covered by accident benefits?

Accident benefits will cover you for lost income, medical and rehabilitation costs, funeral costs, and more. It will also cover an insured injured person for costs to travel to and from treatment, ambulatory costs, equipment such as wheelchairs and crutches, damaged clothing from the accident and lost tuition costs for injured students. Other coverages include housekeeping and home maintenance, attendant or aide care, and caregiver benefits should the insured injured person qualify. 

Increased accident benefits may be purchased to increase the limits of certain benefits of what is offered under the standard mandatory accident benefits.

It is important to note that accident benefits coverage is secondary to government health plans, such as OHIP, and private or employee health plans, such as medical treatment, rehabilitation, and short-term or long-term disability.

Income Replacement Benefit (IRB)

This accident benefits coverage is provided if the injured insured person cannot work their regular employment duties. If the insured qualifies, they will be entitled to 70% of their gross weekly income to a maximum of $400 per week. It must be established that they are substantially unable to perform their employment duties. After two years, the insured person would have to establish that they were unable to qualify for any employment at your educational or training level.

Increased Coverage Options - There is an option to increase the income replacement benefit coverage. The weekly limit can be increased to $600, $800 or $1,000 per week. 

Caregiver Benefit (CGB)

This accident benefits coverage is provided if the injured insured person cannot perform their primary caregiving duties for a dependant such as children or elderly parents. They can receive reimbursement for incurred expenses for assistance with caregiving duties. The insured would be entitled to $250 per week for the first dependant and $50 per week for any additional dependants. This benefit is only for insureds who suffer a catastrophic loss or if the increased coverage is purchased.

Increased Coverage Options - Under the standard coverage, the caregiver benefit is only available for those who suffer catastrophic losses, however, coverage can be purchased to be added to include minor injuries and non-catastrophic losses.

Medical and Rehabilitation Benefits

Medical and rehabilitation benefits will cover the injured insured person for incurred medical expenses and rehabilitation expenses not covered through government health plans or private/employment health plans. These may include prescriptions, physiotherapy, massage or chiropractic sessions, TENS machines, wheelchairs and crutches, occupational therapy. If you fall under the Minor Injury Guideline (sprains, strains, whiplash, subluxations, contusions, abrasions, lacerations, etc.), you would be entitled to $3,500. If your injuries are not minor but not catastrophic, you would qualify for up to $65K within five years. If your injuries are catastrophic (paraplegia, tetraplegia, impairment of ambulatory mobility or amputation of a limb, loss of vision, brain injuries, etc.), you can qualify for up to $1 million.

Increased Coverage Options - Coverage can be increased to $130,000 for five years post-accident or $1 million for life post-accident. For catastrophic losses, this benefit can be increased to $2 million for life post-accident. The optional benefit must be on the policy before the loss occurs.

Death Benefit

If a vehicle collision results in a fatality, this standard benefit means the surviving spouse of the deceased insured would be entitled to$25,000, and the surviving dependants would be entitled to $10,000 each.

Increased Coverage Options - Death Benefits coverage can be increased from the standard $25,000 for surviving spouse and $10,000 for each surviving dependant to $50,000 for surviving spouse and $20,000 for each surviving dependant respectively.

Funeral Benefits

If an accident results in a fatality, this benefit would pay up to $6,000 towards funeral costs.

Increased Coverage Options - To provide additional coverage, funeral benefit coverage can be increased to $8,000.

Tort Deductible Benefit

The tort deductible benefit is a standard amount deducted from a settlement or court award for pain and suffering.

Increased Coverage Options - There is an option to purchase coverage to reduce the standard deductible.

Non-Earner Benefit (NEB)

An injured insured person can qualify for this benefit if there is a complete inability to carry on a normal life. This standard benefit is a two-year benefit. The insured would be entitled to $185 per week and would begin four weeks after the onset of the complete inability to carry on everyday life.

Attendant Care Benefit

Attendant care benefit is compensation for the cost of an attendant, including their transportation to assist with care needs such as bathing, dressing, accompanying to treatment, and more. Insureds under the Minor Injury Guideline do not qualify for this benefit. Non-catastrophic losses can qualify up to $3,000 per month to a combined limit of $65,000 for medical, rehabilitation, and attendant care within five years. Catastrophic losses can qualify up to $6,000 per month to a combined lifetime limit of $1 million for medical, rehabilitation, and attendant care.

Housekeeping and Home Maintenance Benefit 

The benefit is only available under standard accident benefits for insured who suffer catastrophic losses and pays $100 per week for professional cleaning services. This benefit can be purchased to be added to minor injuries and non-catastrophic losses.

Is there additional accident benefits coverage available?

Dependant care benefit and indexation benefit can be added to your auto insurance policy to provide additional coverage. 

Dependant care benefit can be purchased for costs an injured insured person incurs to care for dependants. This benefit can be payable even if the insured qualifies for an income replacement benefit (unlike caregiver benefit where only one can be selected between IRB and CGB). This benefit pays $75 per week for the first dependant and $25 per week for each additional dependant to a maximum of $150 per week for life.

Indexation benefit will automatically adjust accident benefits according to the Consumer Price Index for Canada. 

How much do accident benefits cost?

The cost of accident benefits coverage is dependent on many factors including the type of coverage on your automobile policy, and if there are additional or increased coverages added to your insurance policy.

Below are three examples of auto insurance quotes from Canadian insurance companies for three different drivers. These are helpful to understand the cost of auto insurance in Ontario and the cost of increased accident benefits. Increased coverages and optional coverages for extra protection are available if preferred. Prices for optional increased accident benefits coverages are relatively inexpensive and good value, especially considering how essential these coverages may be if hurt in an accident.

Please keep in mind that these are just examples, we recommend speaking to an insurance broker who will get you several auto insurance quotes from insurance companies tailored to your specific needs and will explain coverages and costs to help you decide what policy is best for you.

Pricing Example #1

A female driver in her 40s, living in Vineland, Ontario, driving a two-year-old SUV.

Here is the cost breakdown to increase each accident benefits coverage. 

 Pricing Example #2

A couple in their late 60s, living in Oakville, Ontario, who drives a new SUV and a sports car, and have bundled multi-vehicle insurance.

Here is the cost breakdown to increase each accident benefits coverage. 

Pricing Example #3

A 21-year-old male, driving a five-year-old vehicle, living in downtown Hamilton, Ontario, who is G2 licenced, and is purchasing insurance for the first time.

Here is the cost breakdown to increase each accident benefits coverage. 

What happens if you don't have accident benefits?

Suppose an injured party such as a cyclist or pedestrian does not carry their own automobile insurance policy. In that case, they can claim under any insurance policy of any vehicle involved in the accident. If there is no identified vehicle, such as in a hit and run collision, a claim can be made under the Motor Vehicle Accident Claims Fund. This fund can pay up to the $200,000 legal liability limit in Ontario per accident. The injured party may sue for general and special damages.

Where can I get accident benefits coverage?

You can get accident benefits coverage and auto insurance by speaking with our expert brokers at Morison Insurance. We will take the time to explain your insurance coverage such as accident benefits, including standard and increased and optional accident benefits coverages, so you can make an informed choice about the level of coverage you want. Get started today by filling out the form on our website, or by calling 1-800-463-8074. We look forward to speaking with you. 

This content is written by our Morison Insurance team. It is provided for general information only. Insurance needs differ from person to person, and this article is therefore not a substitute for professional advice about your individual insurance needs which can be obtained by speaking to one of our brokers.