Financial Services Commission of Ontario recommends reducing deductibles
for injured victims and eliminating them for families of deceased victims
TORONTO, April 3 /CNW/ - The five-year review of the insurance industry
undertaken by the Financial Services Commission of Ontario released this
afternoon is good news for accident victims facing massive deductibles imposed
by auto insurers.
The Ontario Trial Lawyers Association (OTLA) and the Ontario Bar
Association (OBA) welcomed the report, particularly Recommendation No. 31,
which advises the government to reduce the deductibles for injured accident
victims currently at $15,000 and $30,000 down to $10,000 and $20,000.
Furthermore, FSCO recommended current deductibles charged to families of
deceased accident victims be eliminated for awards covering pain and
suffering. These deductibles were charged to awards under $50,000.
"Financial Services Superintendent Robert Christie has quite
appropriately recognized the punitive nature of the deductibles kept by the
insurance industry," said OTLA President Patrick Brown. "Mr. Christie has
recognized these victims and their families have been denied access to justice
by the insurance industry."
"We look forward to working with the McGuinty government and the
insurance industry to implement these changes without distractions from
industry threats about increased premiums," said Richard Halpern, Chair of the
Ontario Bar Association's Automobile Insurance Working Group. "As it has been
doing for weeks, the insurance lobby will likely now claim that they need
higher premiums to afford the kinds of smart, progressive changes in the FSCO
report. But the insurance industry has always been one of Canada's most
profitable - and, in our view, they can easily afford the progressive and
sensible changes proposed in the FSCO report."
The FSCO review also recommends a study aimed at further tort changes
that would increase access to justice for citizens. The OBA and OTLA look
forward to co-operating fully with any future study with the insurance
Today's report also comes as welcome news to families who were charged
excessive deductibles by the insurance industry after losing a loved one to an
auto accident. Several family members banded together in Toronto in June,
2008, to publicly call for reform.
Justice Coulter Osborne, author of the 2007 review of the civil justice
system, referred to the deductibles as a "tax on pain."
The family of Julia Rushnell, who lost her parents when a truck hit their
car in a 2004 crash, could be forced to pay up to $300,000 in deductibles,
after more than four years of foot-dragging by the insurance company
representing the truck's driver.
"No amount of money will bring back my mother and father," Ms. Rushnell
said. "But if these recommendations on deductibles are approved, at least
other families won't have to go through the pain and misery that our family
was forced to go through by an insurance industry that does not really care
Stephen Nelson lost his mother in a similar 2004 accident. The insurance
company held back $165,000 in deductibles against compensation awards to Mrs.
Nelson's children and grand-children, but not until after making the family
sue the company to force it to live up to its obligations.
"It's gratifying to see that the voices of the families of innocent
accident victims have finally been heard in the corridors of power," Mr.
Nelson said today. "My hope now is that the government will resist the efforts
of the insurance industry to again attempt to evade their responsibility to
those who have suffered losses."
The FSCO auto insurance review is available at:
For further information:
For further information: Patrick Brown, OTLA President, (416) 366-3311
Ext 6521; Richard Halpern, OBA Automobile Insurance Working Group, (416)