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Should you increase your accident benefits coverage?

March 8, 2022
4 mins
A man holds his neck after being involved in a rear-end collision/car accident

If you’ve ever been involved in a motor vehicle collision, you know it can feel as if your world has been turned upside down. There can be uncertainty about your financial situation as you deal with medical costs, rehabilitation, and even a loss of income.

Fortunately, if you live in Ontario, you’ll have access to Statutory Accident Benefits, which are included by law in all standard auto policies across the province. But first, it’s important to know what this coverage pays for in the event of a collision. Understanding these benefits can help you determine how much additional coverage you may need.

What do accident benefits cover?

Accident benefits take effect whenever someone is injured in a motor vehicle collision, regardless of fault. The coverage applies to a wide range of people, including the drivers, passengers, and even bystanders and pedestrians. It offers the following:

  • Medical, rehabilitation, and attendant care benefits
  • Income replacement benefits
  • Non-earner benefits
  • Caregiver benefits
  • Death and funeral benefits

Accident benefits coverage is designed to provide you and other insured people on your policy relief if you suffer injury from an auto collision. This coverage includes medical coverage beyond what your provincial healthcare plan offers, as well as income replacement if you are unable to continue working immediately following the incident.

Is the minimum accident benefits coverage enough?

Every province in Canada states the minimum amount of accident benefits policy owners must have. In many cases, you do have the option of increasing the amount. For example, if your main concern is a loss of income in the event of a collision, increasing the income replacement benefits under your accident benefits coverage can allow for greater weekly income relief.

You may already be eligible for the standard weekly benefit of 70% of your gross income, up to a maximum of $400. That may not feel like enough, especially if you are the full-time earner in your household. For that reason, you may want to consider buying optional income replacement benefits to increase your maximum weekly benefit to $600, $800, or $1,000.

Alternatively, if you’re comfortable with the minimum amount of income replacement coverage you’d have as an injured person, you may want to consider increasing your third-party liability coverage instead to account for any losses that can be acquired from an at-fault collision that causes bodily harm to others.

Not all provinces have the same accident benefits coverage limits

In Ontario, the medical and rehabilitation limit (which pays a maximum of $65,000 for non-catastrophic injuries), can be increased to a maximum of $130,000. However, not all provinces are the same.

There is also the option for policy owners to increase the benefits for medical, rehabilitation and attendant care expenses for all injuries by an additional $1 million (for a total of $2 million).

By comparison, accident benefits (for medical and rehabilitation specifically) in Alberta and Nova Scotia max out at $50,000. British Columbia covers medical costs for residents of the province and offers 90% of lost wages based on income that is less than $100,000.

It’s important to review your auto insurance policy to ensure you understand your coverage limits before you ever need to make a claim.

Is it possible to be over-insured when it comes to accident benefits?

Before you decide to increase your accident benefits coverage, review any extended health care plan you may have, such as through your employer benefits, as it can help you decide if additional coverage is necessary.

Some employee benefit packages may include health insurance (the medical and rehabilitation benefits) coverage for medications, physiotherapy, and upgraded hospital care, just to name a few. By adding extended coverage through your auto insurance policy, you may end up being over-insured. So, it’s best to review each policy before making that extra purchase.

And while it’s always a good idea to compare car insurance rates, it’s especially helpful if you’re changing your policy coverage. Shopping for the most affordable car insurance premium can offset any additional expenses you may have if you do need to increase your accident benefits coverage.

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Scott Marshall

Scott Marshall has spent over 30 years promoting road safety across Canada. He has seen many things from inside the vehicle while training new drivers, retraining licensed drivers, and training new driving instructors. Scott began writing road safety articles in 2005 for a community newspaper and has moved on to more publications from there.

In 2005, Scott was an on-air judge on the Discovery Network's Canada's Worst Driver program for its first three seasons. That gave Scott insight with regards to what makes bad drivers so bad. He was also the host of The National Driving Test internet webisodes.

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