Accident Benefits Coverage 101: Part 3 – Income Replacement

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Part three of the Accident Benefit series deals with the Income Replacement Benefit. There are no changes coming June 1st, 2016 to this benefit but you should be aware of what this benefit entails.

The Income Replacement Benefit may compensate you and other insured persons for lost income if you have been injured in a car accident and as a result you are substantially unable to perform the essential tasks of your employment.

Currently the benefit under the standard policy will provide 70% of gross income up to $400 a week.

Ask yourself how much is your income on a weekly basis and would $400 a week be enough to cover your expenses?

Think about this: what is the best income replacement that will fit your current lifestyle?

  • Is your income close to or greater than $30,000/year? Consider increasing your Income Replacement Benefit to $600/week
  • Is your income closer to or greater than $45,000/year? Consider increasing your Income Replacement Benefit to $800/week.
  • Is your income closer to or greater than $60,000/year? Consider increasing your Income Replacement Benefit to $1,000/week.

The Non-Earner Benefit:

You may not realize that there is a benefit for non-earners. You may qualify for non-earner benefits under the following circumstances:

  • You do not qualify for Income Replacement Benefits,
  • You have not elected Caregiver Benefits,
  • You were a full-time student,
  • Or you have completed your education in the past year but haven’t yet secured employment related to your education.

To qualify for this benefit, you must suffer a complete inability to carry on your normal activities.

Currently there is a waiting period for payment of 6 months after the accident.*  After that the payable rate is $185 a week for seriously injured accident victims that have suffered “a complete inability to carry on a normal life”.  For students, the weekly amount increased to $320 per week at the 2 year anniversary of the accident.*

Non-earner benefits have always been payable for life, if a person still qualifies, with the weekly amounts reduced after the age of 65.*

*Starting June 1st, 2016 the duration to receive non-earner benefits has been reduced to a maximum duration of two years, but the waiting period will be reduced to a four week waiting period.

Important changes are happening June 1st, 2016.  Now is an excellent time to review your car insurance policy with your broker. That’s what we’re here for.  Contact us at W.C. Burgess Insurance to discuss the changes to car insurance in Ontario.