If you’ve been hurt in a car accident in Ontario, you may be receiving Statutory Accident Benefits (“SABS”). These benefits are part of Ontario’s no-fault auto insurance system and are designed to provide financial and medical support while you recover from accident-related injuries. They may include income replacement, medical and rehabilitation expenses, attendant care, and other essential support depending on your situation and insurance coverage. You can receive these benefits even if you are at fault for the accident. This applies because SABS is available regardless of who caused the collision, focusing instead on injury and recovery needs.
At some point, you might be asked by the insurer if you’d like to settle your claim. This means you agree to take a lump sum of money now instead of continuing to get benefits in the future.
While there can be advantages to doing so, there are several important considerations to keep in mind before agreeing to settle your claim. These considerations often include medical uncertainty, future treatment needs, and whether the proposed amount fairly reflects your long-term losses and care requirements.
When can you settle an accident benefits claim?
You can’t settle an accident benefits claim right away after the accident. Settlement discussions are often restricted early on to ensure injuries have time to stabilize and be properly assessed.
In Ontario, you must wait at least one year from the date of the accident before you’re allowed to settle most parts of your SABS claim. This helps ensure that the full extent of your injuries and recovery needs can be better understood before you make a final decision.
This waiting period is meant to protect you. It is difficult to know how your injuries will heal, or if they will, right after the accident. You might think you’re getting better, only to have symptoms come back months later. In many cases, symptoms such as chronic pain, mobility issues, or psychological impacts may evolve over time, which is why early settlement can carry significant long-term risk. Waiting gives you time to understand your needs better before signing anything final.
What happens when you settle?
When you settle, you and your insurance company sign papers (a “Settlement Disclosure Notice” and a release) that say:
- You’ll get a lump sum of money.
- In exchange, you give up your right to get certain benefits in the future (depending on what the settlement covers).
- The insurer pays a negotiated lump sum.
- You release the insurer from paying some or all future accident benefits, depending on the scope of the release.
The Settlement Disclosure Notice is a mandated form in which your rights are outlined, as well as the breakdown of your settlement. The release is a document that formally ends your entitlement to some or all of your benefits, depending on the terms of the settlement agreement.
This is a big decision. Because settlements are generally final, it is critical to assess both current and future medical needs before signing, as worsening conditions are typically not reopened once a release is executed. That is why it’s so important to understand what you’re giving up before you agree.
What happens if you don’t settle?
If you do not settle your claim, your claim remains open and your entitlement to benefits will continue. However, that does not necessarily mean you will receive those benefits. The insurance company may deny you payment or your benefits could expire. Under Ontario’s SABS rules, if you do not settle your claim, your benefits expire five years after the accident unless you have catastrophic injuries.
Can you cancel a settlement agreement?
Yes, but only for a short time. This is called rescinding the settlement.
Pursuant to a Regulation under the Insurance Act, an insured person may rescind the settlement within two business days after the day the insured person signs the Settlement Disclosure Notice or the release, whichever is later. The two-day window does not include weekends or holidays. It is strictly calculated in business days and is intended to protect claimants from rushed decisions.
If you change your mind within those two days, you will need to give written notice to the insurance company to cancel the settlement. Written notice must be delivered promptly and in accordance with the insurer’s required process to be valid.
If you miss the two-day window, the settlement is almost certainly irrevocable. Only if the insurance company did not provide you with the required documentation and information can you revoke the settlement at a later date. Outside of this narrow exception, courts and insurers generally treat signed releases as final and binding.
So, think carefully, ask questions, and make sure you understand everything before signing. Independent legal advice is strongly recommended before executing any settlement documents.
Why legal advice helps
If your insurance company offers you a settlement, it is easy to feel overwhelmed or unsure about what’s fair. A personal injury lawyer can help you understand what the insurance company is offering, whether the amount is fair, and what you’d be giving up. In most cases, a lawyer can negotiate a higher settlement amount for you and ensure your rights under Ontario’s SABS regime are protected.
How Siskinds can help
At Siskinds LLP, we assist individuals across Ontario with navigating complex accident benefits claims following a motor vehicle collision, including settlement reviews and negotiations.
Our personal injury team can review settlement offers and explain the long-term impact of signing a release. They can assess whether your current and future treatment needs are fully accounted for under SABS. They can also advise you on communication with your insurer to ensure your rights are protected throughout the process and negotiate with insurers to help you pursue fair compensation based on your circumstances.
Contact our personal injury department for a free consultation at 877-672-2121.