Motor vehicle accidents are traumatic events. On top of the personal injury you may sustain, there are lengthy and complicated claims processes to follow.
Ontario has a no-fault auto insurance system that provides basic statutory accident benefits, and you may be entitled to additional benefits depending on your policy. In both instances, it’s always best to consult with a personal injury lawyer to ensure you are aware of all your legal options.
In many cases, your lawyer will advise you to settle your accident benefit claim when a dispute about entitlement arises. While this process is faster and less expensive than litigation, there are several important considerations you should be aware of. Below we take a look at five things to know before settling your accident benefits claim.
What Is An Accident Benefit Claim?
Successful accident benefits claims provide compensation to those injured in a car accident or the case of death due to a car accident. This claim may be instituted by passengers in a vehicle or pedestrians affected by a car accident.
In Ontario, Statutory Accident Benefits coverages are provided under legislation for injuries sustained in car accidents. In other words, they are mandatory in every auto insurance policy.
So, whether you or a pedestrian are at fault, there are standard benefits to help compensate you for your injury. These are set out in the Statutory Accident Benefits Schedule, discussed in more detail below.
5 Things You Should Know Before Settling Your Accident Benefits Claim
Settlements are often a better option than litigation when it comes to accident benefits disputes. Not only does it ensure that both parties walk away having reached a suitable agreement, but it is also a faster and more cost-effective option. But, too often, lay people go into settlement negotiations unrepresented by a legal professional and don’t receive the compensation they need and deserve.
It’s always best to contact a personal injury lawyer immediately so they can assist with advising you through the claims process. An insurance company will, more often than not, try to settle on the lowest amount. If you aren’t sure about how much compensation you should receive, you may accept an offer that is below par and will not meet your needs.
Below we take a look at five important things to know before settling your accident benefits claim. It’s imperative that you go through each ensuring that you understand them and that any agreement addresses these potential claims. Should you feel intimidated by legal jargon be sure to set up a free consultation with a legal team to assist you with the way forward.
Income Replacement Benefits Can Continue Beyond The 2-Year Anniversary Of Your Car Accident
One of the biggest misconceptions when it comes to accident benefits is that an insurance company only needs to pay income replacement benefits for two years after your motor vehicle accident. This is simply not true and should be indicated in your settlement agreement.
In the case that you are still unable to earn an income on the two-year anniversary of your collision, insurance companies are still obliged to pay out your income replacement benefits.
Many people believe it is standard practice to only receive this benefit for a period of two years. As a result, they often end up contracting themselves out of longer income replacement periods. This can have a severe effect on your quality of life and your family’s lives.
You should not have to go through the traumatic experience of a motor vehicle accident only to be left destitute after two years. So, under no circumstances should you settle your accident benefit claim if the agreement includes a clause that ceases payment of income replacement after two years and you are still losing income.
Be sure to have a legal professional read over any agreement before settling. They are well-trained to identify clauses that will negatively impact you in the long run.
Before settling your claim, it is important to ascertain whether you qualify for catastrophic benefits. In terms of Ontario law, injured persons who suffer a catastrophic injury as it is legally defined are entitled to comprehensive coverage over and above someone who experiences minor injuries.
If you are unsure whether your personal injury qualifies as catastrophic, it’s important to consult personal injury lawyers to guide you through the process.
According to the legal definition, a catastrophic injury includes things like a severe injury to the brain, spine, or spinal cord. It may also include fractures of the skull or spinal column. It can even be caused by psychological injuries, a number of physical injuries or a combination of psychological and physical injuries. These injuries may result directly from violent trauma in the motor vehicle accident or they may result indirectly from complications of the original injury.
Suffering from a catastrophic injury will usually result in a permanent disability that may affect your ability to function in daily activities and other capacities. Over and above the permanent damage to the injured person, a catastrophic injury also affects the lives of the family members.
Family members often suffer as they watch the lives of their loved ones deteriorate. Further, these family members often have to take on additional responsibilities like a second job to sustain the household or caregiving responsibilities. That’s why victims of catastrophic injury are entitled to substantial financial compensation to assist their lives and the lives of their family members going forward.
So, settling a claim without application to your accident benefits insurer for catastrophic benefits may put you in a position where you miss out on a claim for life-changing compensation and coverage.
Be Careful About Under-Settling
A common occurrence when it comes to accident benefits claims is under-settling. An insurance adjuster will usually try to pay out the lowest amount possible for personal injury claims, especially if you are unrepresented.
Plus, if you intend to sue the at-fault driver, under-settling your accident benefits claim may have a negative impact on your tort claim. This is because the insurance company for the at-fault driver will try to reduce what you have or should have received from your accident benefits insurer from your overall compensation.
So, it’s important that a legal team consults with your accident benefits insurer. They are aware of the value of certain claims and know what you should be getting out.
They also have your best interests at heart and want you to receive the compensation you deserve that will sustain you during a very difficult and trying time. Personal injury lawyers are also well-versed in the rigorous claims process. They know and understand all the fine print and how the insurance company’s assessment works.
Always Make A Counter Offer To The Insurance Company
Many people believe the first offer is the only one and are unaware they have any right to counteroffer. Not only do you have the right to counteroffer, but you should always make a counteroffer when you receive the first settlement offer.
An insurance adjuster always offers the lowest amount. Without legal advice from a personal injury lawyer, many accident victims believe this is what they are entitled to. Thus, they accept the offer without realizing the impact this will have on their lives and any other claims they may have had against the insured vehicle involved.
Plus, your insurance company may also try to mislead you and make you accept their low offer by indicating that it is their final offer. Many unrepresented injured persons feel panicked and accept this as they fear they may receive nothing if they don’t. This is not the case and personal injury lawyers will always advise that you make a counteroffer even in the event that the insurance company says it is their final offer.
More often than not, the insurance company can always afford to go higher on their offer to your accident benefits claim. Because of this, they will accept your counteroffer or negotiations will ensue. Either way, you are likely to end up with more compensation than was previously offered.
So, if you receive an offer from an insurance company for your accident benefits claim, reach out to a legal team immediately to take advice on whether the claim is fair or you should counteroffer.
Know Your Burn Rate
A burn rate is a term not many people are familiar with, especially as it relates to personal injury law. But it is an important part of any accident benefits claim.
A burn rate is the rate at which you consume your accident benefits. The insurance company will assess how much money from the total policy limits you use each year after suffering from your accident.
Insurance companies usually look at this in the context of medical and rehabilitation expenses. Then, the insurance company takes the average of that amount and uses it to determine what you will spend on future medical and rehabilitation expenses.
As a result, they could adjust your claim accordingly if you show that you are using less than what they are paying out. But, this could have a negative effect as you may require the full compensation amount in the future.
It’s always best to contact your personal injury firm to have a company representative attend a meeting with you to ascertain your burn rate.
Your personal injury lawyer will be in a position to advise whether the rate is fair and how this may impact your compensation going forward.
It’s important that you understand your burn rate before embarking on any negotiations for the settlement of your accident benefits claim.
Determining Car Accident Settlement Amounts
It’s not always easy to pursue compensation for a claim when you have no idea what the settlement amounts should be. While these amounts are subject to your final agreement, they do serve as an indication of what one should expect to receive.
Obviously, all claims are decided on their own merits. The unique circumstances of your accident and injuries will affect the compensation you receive. But, you will be in a far better position to negotiate if you are aware of how the car accident settlement amounts are often determined.
What Are Standard Accident Benefits in Ontario?
Ontario is one of the few provinces that have made accident benefits a mandatory part of insurance policies. So, many policies include mandatory plus optional coverage to add on further benefits should the policyholder wish to do so.
The Statutory Accident Benefits Schedule outlines what benefits are covered under a policy. This Act applies to all automobile insurance policies and sets out the mandatory and optional limits for:
- income replacement benefits
- medical and rehabilitation benefits
- and funeral and death benefits
These are the basic benefits all insurance companies must include in their policies.
Income Replacement Benefits, Non-earner, And Caregiver Benefits
There are three sets of compensation claims to assist with loss of wages due to a personal injury. These include income replacement benefits, as well as non-earner benefits, and caregiver benefits.
Income Replacement Benefits
The category you receive will largely depend on how the loss of wages has affected your life. Some of these benefits are interlinked. For example, the income replacement benefit and the caregiver benefits. It will usually be the case that if you have lost income, you will not be able to provide for a dependent.
To start, the income replacement benefit is the most common. If you lose your ability to earn an income due to your personal injury as a result of a motor vehicle accident, you could qualify for this benefit. It is structured to provide the injured person with 70% of their gross income capped at $400 per week.
You do, however, have the option to increase the coverage to $1000 per week should this be required. This benefit aims to ensure that you are not destitute should your accident impair your ability to continue working.
The non-earner accident benefit kicks in when you do not qualify for the income replacement benefit. This is the case when you cannot show lost income as you are not an income earner. It mostly applies to students or retired persons. To qualify for this benefit you need to show that you can no longer continue with daily life as before. You will then receive up to $185 a week.
The last benefit relating to lost income is the caregiver benefit. This benefit applies when you as the injured person were the main caregiver and had dependents. If, because of your personal injury, you can no longer care for your dependents, you may receive compensation for a hired caregiver to look after your dependents. This benefit only applies to certain injuries, but there is optional coverage one can take on to include all injuries.
It’s important to note that two parties may claim caregiver benefits:
- The caregiver so that they may provide for their family
- A dependent of the caregiver in the case of the death of the main earner
Medical And Rehabilitation Benefits
Sustaining a personal injury often comes with heaps of medical and rehabilitation costs. So, many accident benefit policies provide for these costs that are not covered by your private health plan or government.
There is mandatory coverage for injuries that do not qualify as catastrophic injuries. This amount is $65 000. If you suffer from a catastrophic injury, this mandatory coverage increases to $1 million. Like the other benefits, however, there is the option to increase the non-catastrophic injury to $130 000 and the catastrophic injury to $2 million.
The second part of this benefit is the rehabilitation expenses. This usually covers physiotherapy, prescription medication, chiropractic, counselling, and other services not covered by OHIP or your health care plan. These benefits will usually depend on your plan chosen with the assistance of your insurance agent.
Attendant Care Benefits
This benefit is tied into the medical and rehabilitation benefits provides you with a caregiver to assist you at your home or in the hospital so that you can speedily recover from your personal injury. You can receive up to $3,000 per month, and money spent for attendants is included in the limit of $65,000 described above. The things you need to do in order to receive this funding are not straightforward, and a personal injury lawyer can assist you in understanding how to apply for these benefits.
Death And Funeral Benefits
Another standard accident benefit in an Ontario automobile policy is death and funeral benefits. In the event that you pass away due to a motor vehicle accident, the following will be paid out:
- $25 000 to your spouse.
- $10 000 to each of your dependents.
- A maximum amount of $6000 for funeral cover
- $10 000 for former spouses if the deceased had a financial obligation towards them such as alimony payments.
Like the other accident benefits, you have the option to increase the coverage to the following:
- Up to $50 000 for your spouse.
- Up to $20 000 for your dependents.
- Up to $8000 for funeral benefits.
Additional expenses one can recover include under the Ontario automobile policy include:
- Lost educational expenses.
- Expenses of visitors.
- Cost of examinations.
- Damage to clothing, glasses, and other items.
- Housekeeping and home maintenance.
Settling an accident benefit or tort claim will almost always be a better option than fighting it out in litigation. It gives you the opportunity to be involved in the process and negotiate the figures. But insurance companies often try to settle on the lowest amount possible and use your ignorance against you.
So, when you are faced with an accident benefits claim you wish to settle, it is always best to consult a team of legal experts who can guide you through the process. They know all the ins and outs of the process, they can interpret the statute and are well versed in what amounts are fair in the circumstances.
By hiring a legal professional, you don’t miss out on important need-to-know things before you place your signature on the offer. That way, you can ensure you get the compensation you deserve.
Reach out to an expert at Fosters Law today, and let us put your mind at ease while we navigate your claim. In no time, you will be back on your feet financially, and you can focus on recovery.