How Has the Auto Insurance Industry Reacted to COVID-19?

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Car on highway with COVID-19 warning

An eerie calm has descended on some of Ontario’s busiest highways. As Ontarians stay home amid the COVID-19 outbreak, car accident lawyers are seeing fewer serious injuries and insurance providers are receiving fewer accident benefits claims. As a result, payouts are down and savings are up.

Rod Phillips, Ontario’s Finance Minister, has stated that insurance providers should reduce premiums, offer rebates, or defer payments in response to the coronavirus lockdown. On April 16, the provincial government amended its Insurance Act to enable insurers to issue rebates for up to 12 months after the end of a declared emergency.

“We are in unprecedented times and people are experiencing extraordinary financial pressure,” Phillips said in a release. “My message to insurance companies has been clear: they should provide relief that reflects the financial hardships their dedicated customers are facing due to the COVID-19 outbreak.”

Insurance providers appear to be playing along. Earlier in April, the Insurance Bureau of Canada (IBC) announced hundreds of millions of dollars in customer savings.

“For consumers whose driving habits have changed significantly, IBC member companies are offering reductions in auto insurance premiums to reflect this reduced risk,” read an IBC release. “IBC expects this could result in $600 million in savings to consumers. The reductions will continue for the next 90 days. Additionally, insurers have supported Canadians and businesses who are most adversely affected by honouring requests to defer premiums. Thousands of Canadians have had their premiums deferred.”

Independent of the IBC notice, Aviva Canada announced $100 million in relief, including premium reductions of up to 75 per cent for clients who have stopped driving completely. TD Insurance said it will allow certain auto customers to defer payments for up to 90 days, and CAA Insurance also announced reduced rates.

“CAA is really proud right now to be offering relief to consumers by reducing our rates on home and auto insurance by 10 per cent,” CAA President Matthew Turack said in early April.

Unfortunately, premium adjustments won’t help Ontario’s most at-risk auto insurance customers: accident victims who are already receiving benefits.

“We have people who are seriously and catastrophically injured who are in their homes or in community settings and they are vulnerable, by virtue of their often complex constellation of injuries,” said Laurie Davis, executive director of the Ontario Rehabilitation Alliance, to Canadian Underwriter. “They may be paraplegics. They may be quadriplegics. They may have brain injury. They may have all of the above. They may have severe motor and cognitive impairments, which make it difficult at the best of times for them to stay healthy.”

This population, many of whom are current or former clients of Ontario car accident lawyers, faces unique hardships during COVID-19. Individuals who rely on physiotherapy and chiropractic services may regress in their recoveries, and those who rely on home care are at elevated risk of contracting the virus. It is incumbent upon the provincial government, healthcare workers, and insurance providers to determine how best to serve this at-risk community.

If you or a member of your family has been injured in a car accident or has been denied benefits by an insurer, contact Neinstein Personal Injury Lawyers today to learn how we can help. Our team of experienced car accident lawyers will review your claim and manage dealings with your insurance provider while you focus on your recovery.

 

Image credit: Shutterstock

Greg Neinstein, B.A. LLB., is the Managing Partner at Neinstein Personal Injury Lawyers LLP. His practice focuses on serious injury and complex insurance claims, including motor vehicle accidents, slip and fall injuries, long-term disability claims and insurance claims. Greg has extensive mediation and trial experience and has a reputation among his colleagues as a skillful negotiator.
Greg Neinstein
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