FSCO.Covgs

Reading: “What do the coverages mean?,” October 2014.

Authour: Financial Services Commission of Ontario (FSCO)

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BA Quick-Summary: Ontario Coverages This reading outlines standard and optional Ontario auto insurance coverages, including Accident Benefits (e.g., income replacement, attendant care, medical and rehab, caregiver benefit) and Third Party Liability. It also explains Direct Compensation–Property Damage (DC-PD), Uninsured Automobile coverage, and endorsements like Family Protection (OPCF 44R). Definitions of key terms such as tort deductible, minor injury, and catastrophic injury provide context for benefit eligibility and limits.

Pop Quiz

• What are some proposed reforms to Canada's plaintiff-friendly tort system?

Keywords

accident benefits, minor injury, catastrophic injury, tort deductible

In Plain English!

Intro

There are 2 sections in this short reading:

• What do the coverages mean?
• What do the terms mean?

Each section is just a list of defns. This reading is specific to Ontario auto insurance, so I don't think the CAS wants you to memorize all of these definitions. (Many of them are obvious anyway.) Instead you must ask yourself:

• Why is this reading on the syllabus?
• What would be good exam questions?

I scanned the list of coverages and terms, and a few things jumped out:

• accidents benefits
  • This is one of the major ongoing problems with auto insurance in Ontario.
• catastrophic injury
  • This relates to two of the legal cases from the Landmark Legal Cases reading.
• tort deductible
  • There are other syllabus readings related to the tort system, so this strikes me as a topic of importance. (Harris.Tort, Dav.NonPec, AAA.Asbestos)
• minor injury
  • This relates to accident benefits coverage, and classification of an injury as a "minor injury" is intended to help bring costs down in this area. Here is an interesting article from the Toronto Star from 2013: Ontario Minor Injury Cap

Possible Questions

Above, we identified 4 important topics. Let's try to think of a few good exam questions based on those topics. (I'm just brainstorming! You should do the same!)

Accident Benefits and Minor Injury

AccBen 1: Auto insurance afforability is a major issue. Identify a coverage that is a major contributor to these costs.

• You could answer either accident benefits or Third Party Liability (bodily injury), but accident benefits is the better answer here.

AccBen 2: Identify a strategy for controlling these costs.

• A good answer would be the introduction of minor injury guidelines with a cap on compensation of $3,500.

AccBen 3: If this cap were challenged in court, what would be the likely outcome? Explain your reasoning, and cite any relevant precedents.

• Likely outcome: cap would be upheld
• Precedent: Morrow v Zhang (challenged the minor injury cap in Alberta in 2004, and the cap was upheld on appeal.)

Catastrophic Injury

Cat 1: How is a catastrophic injury defined for Ontario auto insurance?

• serious, life-threatening, loss of limbs, eyesight,...

Cat 2: Why would a victim want to have their injury classified as catastrophic?

• There is a higher level of benefits when the injury is catastrophic.

Cat 3: Fully describe an Ontario legal case related to catastrophic injury.

• You could describe either Kusnierz v Economical or Aviva v Pastore.

Tort Deductible

Tort Deductible 1: Define the term tort deductible

• the amount that is deducted from a settlement or court award for pain and suffering

Tort Deductible 2: If a victim is awarded $35,000 for pain and suffering and the tort deductible is $30,000, what is the net amount the victim receives.

• $5,000

Tort Deductible 3: What is the purpose of a tort deductible?

• to reduce litigation of minor claims (because if the award is less than the deductible, the net amount received by the victim would be zero anyway)

Tort Deductible 4: What is the current cap on awards for pain and suffering?

• $100,000 inflation-adjusted from 1978, but subject to certain exceptions (sexual abuse, defamation, negligence causing financial damage)

Tort Deductible 5: What are some proposed reforms to Canada's tort laws?

• JCCV: Do you remember what this means??!! If not, review Harris.Tort.

BattleCodes

• Memorize:
  • defns: accident benefits, minor injury, catastrophic injury, tort deductible

• Conceptual:
  • How do these terms relate to other topics on the syllabus?

• Calculational:
  • none

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POP QUIZ ANSWERS

• Proposed reforms to Canada's tort system: JCCV

• J: Joint & Several Liabiity (eliminate for non-pecuniary damages)
• C: Collateral Source Rule (eliminate)
• C: Compensation Basis (change to net basis)
• V: Vicarious Liability (eliminate)

• See Harris.Tort for details