“Alternatives to WSIB” - Consumerism At It’s Best

During the past two years, many people asked me, “Is there indeed such a thing as an “Alternative to WSIB”? An alternative is just a simple term to help individuals identify with a product in lieu of similar basic coverage afforded by WSIB and yet far more comprehensive. The basic need is NOT “ACCIDENTAL INJURY ONLY” contract providing “Loss of Income” coverage and some emergency medical health care costs associated with the accident, total needs planning a must in the event of injury and/or illness.

The popularity of this solution began with the basic requirements of transport carriers, their customers, fleet insurers and owner operators. The goal of the insurance industry was to provide a cost effective solutions that delivered simplicity and yet more coverage. Over the years, policies were simplified and restructured to increase replacement income based on gross wages and increased coverage on high persistency claims known as “limitations”. Simply it is consumerism without due consideration of the individual’s total needs.

With profits as a primary concern, many carriers today are re-visiting the efficiency of these programs and ultimately their overall exposure. Many “independents” felt that the move to “alternatives to WSIB” essentially just keeps the costs down for the carrier. However, the transport carrier and owner operator profits were dramatically impacted by the loss of drivers, owner operators and increased operational costs which makes this topic a real priority. Today, proper risk management is becoming one of the most important tools to help restore driver retention, reduce operational costs and increase profitability.

When an Owner Operator buys an “Alternative to WSIB” without any consideration to his overall needs it dramatically impacts the industry on a whole. The needs of an Owner Operator are identical to any individual business man. There is a need for replacement income based on his total family income. The need to budget for extended health care costs is irrespective if they are related to an accident. They need to protect their family home/assets and protect themselves when they cross the border to avoid financial disaster should they require emergency medical surgery.

The simplified process came with many complexities. Many times individual owner operators learned after the fact that what was covered and not covered, could expose them to financial losses in excess of $30,000 annually. A good example relating to accident only coverage is when a driver “jack-knife’s” a tractor trailer. The driver sustains major soft tissue injuries throughout the body with an estimated time for recovery of 12-18 months. An Owner Operator has an injury only policy for $3,000 monthly. The Owner Operators annual gross earnings were $175,000, net $50,000 take home. He purchases an “alternative to WSIB” which has a soft tissue limitation of 60 days. Leaving him not covered for 10 months. The Owner Operator’s total loss of income is $36,000, however the claim paid was $6,000. A total loss of $30,000 of income as a result of utilizing an alternative to WSIB

Policies with no limitations and longer wait times to collect a benefit in the above scenario would put $33,000 in Owner Operators pocket. The independent owner operator recovers peacefully, decreases operational costs and increases profits by addressing his total needs.

For more information, please contact us directly or visit our website at www.lmdfinancial.com

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