The Importance of Reading Your Insurance Policy, and Considering Optional Benefits
The Importance of Reading Your Insurance Policy, and Considering Optional Benefits
Many individuals choose not to review their insurance policies in detail. They either trust their broker's summary or believe that the standard coverage would be “sufficient”. This may simplify or speed up matters at the time. However, issues with coverage usually come to light when a claim is filed and by then, it is too late to modify the policy.
Reading insurance contracts is not an easy task; they are usually lengthy documents with complicated clauses and legal terms. However, it would be dangerous to ignore the details; in order to ensure the coverage you are paying for would meet your needs in case of an accident, it is important to review your policy documents with your broker line by line.
Why You Should Read Your Coverage Documents
When individuals skim or sign their insurance policy documents without reading them first, they often miss the following crucial details:
-
Exclusions and limits hidden in fine print; for instance, rehabilitation coverage may seem generous at first glance. However, most may be concerned that it is stopped after only one year, regardless of the insured’s recovery status.
-
Common misconceptions about benefits; for example, many believe that caregiver benefits or income replacement are automatically included in every insurance policy. In reality, the "standard package" often includes significantly less benefits than individuals often assume.
-
Coverage limits that do not match practical costs; for instance, a $25,000 medical benefit may seem sufficient at first. In reality, it can run out in just a few months if the insured individual is seriously injured.
Reviewing your documents in detail will prompt you to seriously consider how your insurance coverage can affect your life in the event of an unforeseen accident.
How to Discuss Optional Benefits with Your Broker
Basic insurance policies are limited, which is why optional benefits are usually available. All too frequently, individuals tend to ignore these benefits in order to save an additional $10 or $20 a month on their premium. However, the equation quickly takes a shift when weighing risk over protection.
Do not just ask your broker, "What is included?". Instead, consider the following points:
-
How much would I be compensated under this policy if I missed six months of work?
-
How does the optional upgrade differ from the standard accident benefits?
-
Would I receive coverage if my spouse needed to take time off work to care for me?
-
What are the costs of including these options versus excluding them?
It is important to frame discussions around "potential financial losses" rather than "extra costs." A few extra dollars a month can save thousands of dollars in the future.
The Significant Shift Occurring in July 2026: Income Replacement Benefits (IRB)
Income Replacement Benefits (IRB) are currently automatically included in the majority of Ontario’s auto insurance policies. These benefits are intended to partially replace your income in the event that an automobile accident renders you unable to work.
IRB will no longer be standard as of July 2026 and will be considered optional; this implies that individuals will not receive IRB coverage unless they specifically purchase and include it in their policy.
This change is highly significant since IRB is one of the most important components of accident benefits. Medical bills may mount up, but losing paycheques can devastate a household even more quickly. An individual may be forced to rely solely on family support, short-term employer disability plans (if available), or personal savings in the absence of IRB.
Many insured individuals may mistakenly assume that they are still covered with IRB. However, due to the recent changes, IRB will no longer be included in standard policies after July 2026 unless explicitly requested and purchased.
Reasons to Consider Purchasing IRB
Consider this; how would your family manage if you made $60,000 a year and were hurt in an accident that prevented you from working for a year? Utility bills, groceries, rent or mortgage payments, and auto payments will all continue, regardless of whether or not you are receiving payment from work.
Your insurer may compensate you for some of your medical and rehabilitation costs without IRB. However, this will not make up for the money you have lost while off work. IRB will help you support yourself while you stay home and heal.
For independent contractors, self-employed individuals, or anyone without a strong employer benefits plan, IRB is a necessity rather than a luxury.
