How Changes to Auto Insurance Impact Brokers James L. Vigmond, Partner Robert M. Durante, Partner Bill Kirwin, Accident Benefits Specialist Steven Smyth, Accident Benefits Specialist (or am I living in the shadow – the sword of Damocles)

HOW CHANGES TO AUTO INSURANCE IMPACT BROKERS What are the changes? What effect does it have on third party liability limits? The duty to inform myself of my insured’s needs The “deep pockets” effect

What Are The Changes? The amount of available benefits are dramatically reduced Threshold for meeting CAT impairment is dramatically increased … a toxic combination

Available Benefits – Non-CAT Before After Medical/Rehab $50,000 // 10 years $65,000 combined // 5 years with monthly max. of $3,000 Attendant Care $36,000 // 2 years Non-Earner Benefit $185/week* payable 6 months post-accident (Payable for life if insured suffered a complete inability to carry on normal life) $185/week payable 4 weeks post-accident (Payable for 2 years) *$320/week at 2 year mark if Student Benefits

Available Benefits – CAT Before After Medical/Rehab $1,000,000 (lifetime) $1,000,000 combined Attendant Care

Enhanced Benefits are Available

Changes to Catastrophic Impairment Most frequent before changes: Glasgow Coma Scale of 9 or less 55% Whole Person Impairment A single marked mental/behavioural impairment

Post-June 1st, 2016 No Glasgow Coma Scale Use of 6th edition of guides artificially & dramatically reduces assessment for mental/behavioural disorders Requires 3+ marked mental/behavioural impairments Very few people will qualify for Catastrophic Benefits Requires positive imaging for adult brain injury

Interplay of A/B and Tort Tort gets credit for available benefits Abundant benefits decreases tort exposure Scarce benefits increases tort exposure Plaintiffs will identify targets with deep pockets

The Duty to Inform Myself of Insured’s Needs Arises from obligation to give advice Existing renewal practice conflicts with duty established in case law “What did my insurance broker recommend?” Affects third party liability limits Affects enhanced limits for accident benefits The insurance broker will become the next “deep pocket”