Unless you’re a lawyer or are familiar with insurance laws you probably don’t understand the car insurance coverage you have or need.

This situation will only get worse come Sept. 1, when Ontario’s new no-fault benefits laws come into force.

If you are in a car accident you’re entitled to make a claim for no-fault benefits. These benefits cover such things as medical/rehabilitation costs, income loss, caregiver and housekeeping expenses.

As of Sept. 1, these benefits will be restricted and reduced save in cases of catastrophic injury.

If you have car insurance, the claim for no-fault benefits is made against your insurer, not the insurer of the other vehicle, regardless of who caused the accident.

If you are a pedestrian or cyclist and involved in a car accident but don’t have car insurance, the claim for no-fault benefits is made against the insurer of the car.

Aside from a claim for no-fault benefits, you can also sue the other driver or owner for negligence and claim money for such things as pain and suffering, loss of enjoyment of life, future loss of income and additional medical rehab payments not included in the no-fault benefits. But the law doesn’t permit such a claim unless your injuries are “serious and permanent”.

Worse, an automatic $30,000 is deducted from any award under $100,000 (although you can pay an extra premium up front and the $30,000 is lowered to $20,000).

To qualify as serious and permanent, the harm must be permanent and the injury must substantially interfere with one’s ability to continue with their employment, or substantially interfere with most of one’s usual daily activities.

That prejudices retirees, children, students and the unemployed, according to personal injury lawyer Adam Wagman.

Since most claims don’t involve injuries that meet the definition of serious and permanent, accident victims are usually left with a claim for only no-fault benefits.

That’s why you need to know the precise amount of these benefits so you can decide if you have adequate coverage.

Ontario’s insurance regulator, the Financial Services Commission of Ontario, has ordered car insurers to explain the massive changes looming for car owners effective Sept. 1.

Additional premiums

You’ll soon be receiving a document titled Changes to Ontario Auto Insurance Give You More Choice.

What “more choice” means is that your coverage is automatically reduced but you’ll have the option of paying additional premiums to beef up your no-fault benefits. But chances are very few will sign up for increased coverage.

According to personal injury lawyer Darcy Merkur, approximately 3% of car owners have purchased the currently available optional coverage and “it is unrealistic to think that motorists will suddenly understand the need to purchase optional coverage to properly protect themselves in the event of a motor vehicle accident.”

But if you don’t purchase optional coverage and are in an accident after Sept. 1, you’ll have far less benefits as compared to having been in the accident before Sept. 1.

Worse, if you don’t own a car and don’t have car insurance, you’ll have no ability to purchase the optional coverage.

According to Patrick Brown, Past President of the Ontario Trial Lawyers Association, the new law “creates an injustice” for pedestrians, cyclists and public transit users who don’t own a car.

He adds, “perhaps the greatest injustice of this new law falls upon children. If a parent doesn’t own a car there will be less coverage for their children hurt in a car accident.”

Brown argues “if laws are to be changed, why not protect the most vulnerable first? Let’s not forget that people who do not drive are consumers as well”.

According to Wagman, promises by Ontario’s finance minister to modify the law to benefit both consumers and insurers haven’t been kept, the new laws are one-sided and many innocent accident victims in need of income protection, medical treatment and rehab will suffer. Yes, but now we have more choice, don’t we?

alan.shanoff@sunmedia.ca

NICKY Scourfield was in sparkling form with an undefeated century for leaders Carew, who rattled up 217-5 at Saundersfoot in Division One of the Antur Insurance Pembrokeshire County League.

His knock included six sixes and eight fours.

There were also useful contributions down the order from Philip Jones (31 no), Rhys Davies (26) Ian Sefton (25) and Simon Wood (21).

For Saundersfoot, Nick Cope (2-23) was the pick of the bowlers.

After winning three of their first six games, title chasing Cresselly took the field first against Whitland. And Whitland were soon in trouble, eventually being bowled out for 159.

For Whitland, David Lee (38) and Paul Davies (29) made headway against a bowling attack spearheaded by Sam Harts (4-26), James Venables (2-17), and Morgan Giloenhuys (2-34).

It was also tough going for Lawrenny, who were bowled out for 125 by Neyland. Steve Lewis hit 22 and Robert Williams 20.

The damage with the ball was inflicted by Nicholas Koomen, who claimed 4-44 and Patrick Hanon (3-38).

The bulk of the runs from a St Ishmael score of 193-5 against Narberth were contributed by Stewart Kimpton (50), Robbie Thomas (45), Peter Bradshaw (28) and Paul Palmer (28). Ben Quartermaine took 2-42.

The draw has been made for the quarter-finals of the Harris-Allen Bowl Competition, and the line-up is Cresselly v Whitland; Fishguard v Llangwm; Haverfordwest v Crymych; Lamphey v Carew. Ties to be played on June 29 and July 1.

As property insurance grows costlier, more Texas homeowners are opting for higher deductibles.

The percentage of homeowners with deductibles of 2 percent or greater climbed to 17 percent last year, up from 10 percent in 2005.

And the increase is more pronounced in counties closer to the Gulf of Mexico.

Forty-one percent of homeowners living in counties once removed from the coast, such as Harris and Fort Bend counties, had deductibles of 2 percent or greater last year, according to data compiled by the Office of Public Insurance Counsel. That's up from 20 percent in 2005.

The numbers may actually be higher, according to consumer agency, because those counts don't include deductibles often charged separately for windstorm and hail claims.

The percentage of Texas Windstorm Insurance Association policyholders with deductibles of 2 percent or greater jumped to 42 percent last year, up from 12 percent in 2005, the insurer said.

The state-created association sells coverage to homeowners in coastal counties who can't find it elsewhere.

As hurricanes and other severe weather drive up property losses, insurers are passing along more of the financial risk to policyholders through higher deductibles.

Choosing a bigger deductible can lower the premiums consumers pay but can also leave them with a higher tab when they file a claim.

Pasadena resident Stan Ganderson felt he had no choice but to take on the extra risk when his annual premiums soared 22.5 percent, to $2,566, earlier this year.

To lower his premium, he dropped coverage for certain types of water and foundation damage and increased his deductible from a flat $1,000 to 1 percent of his home's value. The lowered coverage and increased deductible of about $1,600 brought his premium back within his budget to $1,895.

He still has a separate 2 percent deductible for wind claims.

Big increase

“I've never had an increase that big, and to have to increase my deductible and drop coverage I've had for many years doesn't seem like the right way to combat it,” he said.

Deductibles used to be flat dollar amounts, such as $500 or $1,000. But in recent years, more insurance companies have been offering deductibles that are 1 to 5 percent of the amount of coverage a homeowner purchased. Many also have separate deductibles for wind or hurricane damage.

Edward Schreiber, president of Houston-based GEM Insurance Agencies, said he's seen carriers requiring a 2 percent to 5 percent deductible for named storms, especially for people living south of Interstate 10.

The first $150,000

Some of his clients with homes valued at more than $500,000 are choosing a 5 percent deductible to keep premium costs low, he said. He recently sold a policy for a $3 million home with a 5 percent deductible, meaning the homeowner would be on the hook for the first $150,000 of a claim, he said.

“One of the things that we advise our clients who have those high deductibles is to make sure that they tell their spouses so there is not a surprise when the claim hits about having such a high deductible,” he said.

Wrong assumptions

Consumers may not understand that percentage deductibles apply to the amount of insurance on the home.

“We have heard anecdotally that some policyholders wrongly assume the 2 percent or 5 percent applies to the amount of the claim,” said Deeia Beck, head of the Office of Public Insurance Counsel.

“While we understand that some consumers may want to self-insure for $10,000 or more, we want it made clear to the policyholder what they are getting into, including the exact dollar amount of their deductible,” Beck said.

The shift to higher deductibles can also be problematic because it often occurs upon renewal, when the policyholder is not being advised by an agent, Beck said.

Cap may be proposed

Some policyholders have complained that they received notices that say their renewal is contingent upon accepting a 5 percent hurricane deductible, she said.

The Texas Department of Insurance plans to propose a rule soon that could cap how much insurers can increase a deductible and require companies to tell consumers how much their deductible would change in dollar amounts, while also providing information on how they can shop around.

"It's something that needs to be done, whether it's InsureNet or whoever,” Switzer said. "It's a procedure that should be in place for all states — get these damn cars off the road that aren't insured.”

The former Sooner and Dallas Cowboysfootball coach confirmed he has been traveling across the country helping promote InsureNet, a Chicago-based company part of an entity called the Oklahoma Public Safety Consortium.

The consortium is one of four bidders competing for an Oklahoma insurance verification enforcement contract. Other bidders include Canadian-based Intelligent Imaging Systems of Edmonton, Alberta; MV VeriSol, headquartered in Kingston, Ga.; and American Traffic Solutions, based in Scottsdale, Ariz.

Randy Ross, deputy director of the Oklahoma Department of Central Services, said his agency is evaluating the bids and hopes to award a contract soon. He said state officials hope it will help close Oklahoma's budget gap by generating at least $50 million in new revenue.

Oklahoma Insurance Department officials estimate between 18 and 23 percent of the vehicles on Oklahoma roads are uninsured. The contract calls for fixed or mobile cameras to photograph license plates on moving vehicles. Computers would transmit the data and match it to insurance verification information on national, state and insurance company databases.

Industry officials say technology has advanced to the point it is possible to almost instantaneously determine whether a car is listed as having insurance. If no insurance is found, the owner of the vehicle would be sent a letter giving the individual the opportunity to show that a mistake has been made or pay a $250 fine.

"There are no privacy issues. No personal data is involved,” said Charles Pecchio, chairman of MV VeriSol.

Switzer said the cameras don't take pictures of people in the cars.

People who have insurance will benefit because the cost of uninsured motorist coverage will drop as more people are forced to buy insurance, Pecchio said. It should also help with health insurance rates because a lot of uninsured motorists injured in accidents are going to emergency rooms and having Medicaid pay for their treatment.

The combination of improved technology and declining revenue has prompted many states to consider adopting new insurance verification enforcement systems, Pecchio said.

Switzer said he was happy to oblige because he believes in their product. He said he was introduced to the InsureNet executives by insurance agent and former University of Oklahoma football player Tinker Owens, who is a company consultant.

Former Republican state Rep. Wayne Pettigrew of Edmond has also done national marketing and government relations work for the company.

Switzer said he introduced InsureNet officials to executives in several states, including Oklahoma, Texas, Tennessee, Kansas, Missouri and New Mexico.

"All I do is open the door for them,” Switzer said. "I've done that, haven't been paid a dime. ... I've invested a lot of money just flying myself around. They haven't paid my expenses or anything. ... If the states go on these contracts, I'm sure I'll get paid for doing it.”

Switzer said he has no written contract, has never invested in the company and doesn't own a share of stock. "I've done business like that,” he said. "I do business with a lot of people by handshake and so far this has been that way.”

Switzer's support of Brad Henry in the 2002 gubernatorial campaign was credited by many political observers with helping the governor get elected, but Switzer said he doesn't think his relationship had anything to do with InsureNet seeking him out.

"Brad Henry is not even involved in this,” he said.

Jonathan Miller, chairman of InsureNet, said his company is willing to guarantee the state his consortium's system would see tags of at least 80 percent of the vehicles on Oklahoma roads each year. This would require installation of at least 200 cameras, some in marked mobile units.

Miller said his company is also willing to guarantee the state will net $40 million to $50 million in revenue during the first full year of implementation if the state's insurance verification data is accurate. The consortium would receive 30 percent of gross revenues, which would amount to more than $21 million if the state makes $50 million.

However, the winning bidder will also be responsible for paying costs of installing and operating the system. Each camera can be as much as $22,000 to $50,000, officials said.

Pecchio said his company doesn't guarantee state revenues, but he thinks the state's projection of $50 million can be reached.