July 21, 2014
In his interview, Vice-President of Insurance Bureau of Canada has brought some good news for Ontario’s motorists:
The quick introduction of Bill 15 is a very strong message from the Wynne government that it is serious about reducing fraud and the high costs in Ontario’s current auto insurance system. But we shouldn’t lose sight of the other good news: insurers are passing these savings along to consumers in the form of reduced rates.
He also added,
At the end of the day, all of us – the insurance industry, government and consumers – must work together to drive down unnecessary claim costs that do not help claimants recover from injuries. The insurance industry is committed to doing whatever it takes to build an auto insurance system that will work for decades to come. Access to affordable insurance is fundamental to the health and success of Ontarians.
Below you can find some most important points of the Bill along with explanations of how exactly it will help:
Towing and Storing cars after motor vehicle accidents
Before: After a car accident, your vehicle is to be towed and held in storage for up to 60 days before any notifications. In some cases, facilities owners delay to notify an owner on purpose, in order to increase revenues.
After: Bill 15 demands storage facilities to notify owners sooner. It will significantly low down expenses by managing the cost of vehicle storage after a car accident.
Dispute Resolution System
Before: The current system is not flexible enough, taking much time for hearings and making decisions.
After: Bill 15 is pursuing creation of a completely new efficient system. It will be much more flexible ensuing preventing backlogs and helping to reach decisions much faster. This will result in much more efficient resources consuming.
Prejudgment Interest in car accident settlements
Before: The current disadvantages include but not limited to inefficient prejudgement interest rates, over-compensation for personal injuries, long time to settle.
After: Currently, prejudgment interest on pain and suffering is 5% and (1.3% on pecuniary). Both of them to be aligned to today’s typical rates. Aligning interest will result in saving millions of dollars, avoiding claimants overcompensation and making sure settlements are gotten sooner and faster.
The main purpose of prejudgment interest is to compensate a plaintiff for the lost time value of money, avoiding overcompensation. It results in the plaintiff to receive the full value as it was on the day a notice of the claim was served.