Why is the Ontario government taking away money they deserve and transferring it to the insurance industry?
How nice for the insurance industry. Take money from deserving accident victims and give it to insurance companies. Instead of increasing the deductible the government ought to abolish it. There’s no principled reason to apply a deductible....
Hundreds protest the Ontario government’s proposed auto insurance cuts outside Queen's Park in Toronto on June 3, 2015. (Dave Abel/Toronto Sun) A slugging match recently erupted between car insurance companies and Ontario personal injury lawyers.
The Insurance Bureau of Canada (IBC) opened by claiming the public needs regulatory oversight of contingency fees charged by personal injury lawyers.
The IBC feels a change is necessary to protect consumers and allow the government to evaluate the impact of lawyers’ fees on the auto insurance system.
The Ontario Trial Lawyers Association (OTLA) countered by releasing a study it commissioned concerning auto insurance premiums.
According to the study, prepared by two professors at York University’s Schulich School of Business, “consumers in Ontario may have overpaid for auto insurance by between $3 and $4 billion over the period 2001 to 2013.” The OTLA urged an independent “thorough and truly transparent” review of auto insurance by Ontario’s Auditor General.
Reacting quickly, the IBC fired back through a press release, pointing the finger back at personal injury lawyers claiming, “lawyers’ fees are simply too high and have a significant impact on the cost of auto insurance.”
The IBC supported its conclusion by claiming some lawyers charge 40%, while others between 25% and 33% of any settlement or judgment.
I doubt many lawyers would dare charge a 40% contingency fee, although even a 25% to 33% fee may be too high in some cases.
But, the IBC forgot to mention clients don’t pay the entire contingency fee as a good part of the fee is paid by the insurance company.
To rub it in further, the IBC stated, “In 2013, lawyers received an estimated $500 million from injury claimants out of their insurance settlements for bodily injury claims. These are real dollars that never make it to the claimant. IBC will continue to fight for increased transparency so that consumers can actually see where their insurance dollars go.”
But I don’t think insurers want to open the transparency can of worms. If they want to talk about “real dollars” that don’t make it to claimants, check out the vast sums paid by insurers for their so-called independent medical examinations (IMEs), used to belittle or deny claims.
According to the most recent Ontario Health Claims Database, insurance companies paid approximately $372 million for IMEs for accidents taking place in the last four years.
In some years, insurance companies forced almost half of all claimants to attend IMEs and in each year the average amount paid per assessed claimant for these exams exceeded the average amount paid per claimant for all medical and rehabilitation expenses.
Sending claimants for multiple and expensive assessments to pro-insurer experts is a major contributor to insurers’ costs and takes “real dollars” out of the pockets of claimants.
That’s not to say lawyers are free of blame.
There’s a long history of lawyers neglecting to act diligently to expose insurer experts who file partisan reports, sometimes outside their sphere of expertise, used by insurers to delay and deny claims.
As well, quality control at some law firms is substandard.
The FAIR Association of Victims for Accident Insurance Reform has recently posted an announcement stating, “ALERT – we are hearing about more and more cases where time limitations for filing have lapsed due to plaintiff’s legal representatives failing to meet limitation period deadlines.” Then again, motor vehicle litigation and accident benefits claims are highly complex and insurance company tactics often lead to increased fees.
And if the insurance industry wants to point fingers at personal injury lawyers, perhaps they ought to make complete disclosure of the money they spend on defence lawyers and adjusters to deny, delay and defend claims.
Furthermore, how much do insurers pay to fund their massive public relations campaigns -- including political contributions to those in power -- which they effectively use to portray accident victims as opportunistic, malingering or just plain fraudulent?
It seems there is a lot of mud that can be thrown at each side in this messy debate.
But while the debate drags on, insurers continue to exact high premiums and lawyers receive handsome payments for their work. And accident victims? They’re stuck in the middle.
Ontario’s car insurance system seems to work well except for consumers who need it and accident victims who make legitimate claims under it.
After all, the insurance industry is making good money.
Lawyers are amply rewarded acting for plaintiffs and insurance firms.
Doctors earn significant sums preparing insurer-requested medical reports.
Treatment providers receive good compensation for treating the injured.
Premier Kathleen Wynne received generous financial support from the car insurance industry when she ran for the Liberal leadership.
The Liberal party receives significant campaign donations from it.
But here’s the problem. Two problems, actually.
The first is fraud by people trying to rip off insurance companies with phony claims. We agree it happens and it’s a serious problem.
But what we don’t understand is why the amount of fraud -- to hear it from the insurance companies -- never, ever, seems to decrease.
Fraud, we’re told, is the main reason auto insurance premiums in Ontario remain stubbornly high, no matter how many times the government cuts back benefits to all accident victims at the behest of the insurance industry, as it did again in its latest budget passed last week.
We also think there’s another kind of fraud in the insurance industry that needs to be addressed by government.
That fraud happens when people who have faithfully paid their auto insurance premiums year after year are hurt in serious accidents and, when they make legitimate claims for the benefits promised in their policies, are denied them.
It happens when car insurers fight against paying genuine claims from accident victims, falsely making them out to be the enemy and going to absurd lengths in and out of court to deny them the benefits to which they are entitled.
Last week, hundreds of demonstrators at Queen’s Park protested this kind of fraud as the Liberals passed yet another piece of legislation favoured by the insurance industry that will cut in half benefits for people who sustain catastrophic, life-changing injuries in car accidents.
Prior to the passage of the budget, Finance Minister Charles Sousa boasted, “Ontario is the most generous in Canada when it comes to providing coverage for auto insurance.”
Last week, Sun legal affairs analyst Alan Shanoff, demonstrated conclusively in his column how this statement was inaccurate.
In fact, Ontario doesn’t provide the most generous benefits for either catastrophic injuries or for so-called “minor” ones, which can include dislocation of joints, partial tears of tendons and ligaments and whiplash not exhibiting neurological symptoms.
As the FAIR Association of Victims for Accident Insurance Reform put it: “The budget does nothing to ensure that insurer claims management practices are fair and there has been no action (to deal with) ... the biased and corrupt insurer medical examination reports that are disqualifying innocent and legitimate accident victims.”
We agree. It’s time to end this type of insurance fraud, as well.
