Giraffes and Hospital Bills


You’re driving to work some Monday morning, when out of nowhere a giraffe runs in front of your car. You swerve to miss it, and land your car in a tree. The car is destroyed, and you have sustained significant injuries. You have Collision coverage on your pride and joy, so you know that the insurance company will repair the damage. But what about the damages to you?

In Ontario, all automobile insurance policies have coverage built in to put you back together. Under the heading “Accident Benefits” are the specific coverages to look after your expenses for medical costs, like prescription drugs, physio therapy, and so on; as well as benefits to replace the earnings you lost when you parked your car in that maple tree. We get a lot of questions around the Income Replacement coverage.

The Standard Accident Benefits coverage limits in your policy allows for up to $400 per week of income replacement, with the option available to purchase up to $1000 per week of benefit. “How much should I get?” is a question we hear a lot. And “Why wouldn’t I purchase $1000 per week, and never go back to work?” is another question that some folks ask, but mostly to themselves. Here’s the skinny on that…

Any policy, Auto Insurance or otherwise, that covers income replacement, can only pay up to 70% of your gross earnings, regardless of how much coverage you have purchased. So if you make $50,000 per year, or around $1000 per week, the most your auto policy will pay out is $700 per week, no matter how much coverage you select.

Add to that, the Ontario Automobile Insurance policy takes what we call a “Second Payer” stance, meaning that it pays out only after all other benefits are exhausted. If you have a disability benefits plan at work, your auto policy won’t pay any income replacement benefit. The good news is that you can modify your insurance policy any time before a loss. So if you have no benefits at work, and you make more than $600 per week, talk to your broker about adjusting your coverage…before you meet that giraffe.

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