Personal Injury Blog

Paying for Democracy with Fewer Benefits

Apr 19, 2016

by: Juan Carranza

Much has been said in the media recently of the alarming yet established practice of politicians accepting political contributions for face time at fundraising events. The obvious concern is that this kind of fundraising tilts the democratic process in favour of those who can pay to be seen or heard and away from those who can’t pay. Today, the CBC released the names of the 30 biggest political donors in the last three years.

Those of us working with injured accident victims are not surprised to see that the Insurance Bureau of Canada was the fourth largest contributor since 2013. The Insurance Bureau of Canada is the lobby group for casualty and property insurers. Among other things, the IBC lobbies for legislative changes favourable to their interests of improving insurer profits. The problem is that these changes frequently clash with the needs of injured accident victims, who typically don’t have a seat at the fundraising galas. 

Anyone looking at the amendments to the Insurance Act and its regulations over the last ten years, particularly as they relate to compensation for motor vehicle accidents will note a dramatic decline in standard benefits, including: 

  • A reduction of medical and rehabilitation coverage from $100,000 to $3,500 for most injured people;
  • making it harder for an injured person to be categorized as catastrophically injured and therefore access increased coverage;
  • cutting the medical and attendant care coverage for those who are categorized as catastrophically injured people in half;
  • significant reductions to attendant care benefit coverage;
  • severely limiting compensation for attendant care provided by family members, in most cases from minimum wage to zero;
  • a significant reduction to prejudgement interest on damages in lawsuits, making it less costly for insurers to drag out litigation;
  • elimination of the “special award” that used to be available to punish insurers for unreasonably delaying payment of accident benefits;
  • indexing the amount of the “pain and suffering” award that is subject to a $30,000 deduction, so that each year insurers have to pay out less for seriously injured people … while maximum amounts for Income Replacement and other benefits are not indexed.

You are left wondering how such political contributions could not be influencing policy. What is particularly ironic is that these cuts to accident benefits often leave accident victims without coverage for needed treatment or income support, and they are forced to turn to government-funded public services, such as the emergency wards of our public hospitals and social assistance – services we all pay for. These cuts are downloading responsibility from the private sector to the public. It is a transfer of obligations from insurance companies with billions in assets to the overburdened public health system and meagrely funded social assistance programs. The fact that this is done by a government that received six-figure donations from the lobby for those insurers leaves us with more questions than answers. 

To add insult to injury, these cuts to accident benefits in Ontario have continued despite private insurers’ windfall profits as pointed out in a 2014 study by York University professors Fred Lazar and Elli Prisman. Accident victims have ended up bankrolling the insurer’s record profits. Accident victims often lose their jobs, their savings, and their independence; they depend on others for the basic necessities of daily life. They have fewer benefits and they still have their votes - but they don’t have the $315,310 the Insurance Bureau of Canada spent since 2013 in political donations.