What Accident Lawyers want you to Know About ‘Care, not Cash’ Insurance Clause

The Ontario government has proposed a “Care, Not Cash” default clause in our auto insurance policies, which will force auto insurance coverage to pay for treatment rather than cash settlements. This reform was recommended by David Marshall in his 2017 review of Ontario’s auto insurance system. The government has proposed that they will allow Ontarians to still have the ability to be eligible to negotiate a cash settlement by purchasing an optional benefit when they buy auto insurance. In doing this, the Ontario Government has suggested that insurance premiums will go down. As an Ottawa firm of accident lawyers as well as being Ontario drivers, we decided to take a closer look into this new policy.

How does this affect accident victims?

So, under the default, insurers would not be permitted to negotiate a cash settlement with an insured person, except when one or more of the following applies:
  1. The insured person is catastrophically injured;
  2. The claim is for costs not related to medical, rehabilitation and attendant care benefits (e.g., costs to repair vehicles, income replacement benefits);
  3. The policyholder purchased an optional benefit that makes them eligible to negotiate a cash settlement; or
  4. Extenuating circumstances apply that require an exception (e.g., the injured person moves out of the country).

Accident lawyers weight in on the new policy

Speaking from the perspective of an Ottawa accident lawyer who has dealt with many car accident cases, we view this as a big problem. The proposed changes to the current Ontario auto insurance program creates an access to justice issue. Victims of vicious car accidents will find it very difficult to get legal representation on their Accident Benefits (AB) claims, regardless of fault. Most accident lawyers work on a “contingency” basis, meaning they don’t get paid unless a cash settlement is received (lawyers get a percentage of the settlement funds). If there are no settlements, then lawyers will be reluctant to take on any accident benefits claims. The insurance companies can easily take advantage of car accident victims in situations like this. They’ll do so by sending people to “independent” Insurers Examinations (IEs) and denying treatment. IEs are set up with doctors who aren’t there in the client’s best interest, but rather in the interest of the insurance company’s. After all, it’s the insurers who pay the doctors to do the IEs in the first place.

Is it in anyone’s interest to settle the claim?

With the rate at which treatment plans are denied, it is in the interest of both the insurer and the car accident victim to settle the accident benefits claim. Why? The insurance company will save money on expensive IEs and the car accident victim will get cash to spend on desperately needed treatment at their own pace, without the interruption of the insurance company. All said, we hope that both Ontario drivers and the insurance companies realize that the ‘care not cash’ proposal is a bad idea!
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