How Does the 2015 Amendment to the Ontario Insurance Act Impact My Deductible?

An amendment to the Ontario Insurance Act was enacted in 2015 to lower costs that insurance companies face when confronted with auto collision claims. This amendment led to significant increases in deductibles for injured victims. A deductible is the amount of money deducted from an injured person's non-pecuniary damages (i.e., losses related to their pain and suffering and loss of enjoyment of life) resulting from a motor vehicle accident. Non-pecuniary losses, also known as non-economic losses, are damages with no direct monetary value but on which a value must be assigned with respect to the effect of the injuries and impairments on a person's quality of life and lifestyle.

Damage awards and deductibles

This deductible has risen annually since 2015 and will continue to rise each year with inflation. For an individual to receive the full value of his or her pain and suffering claim in 2021, a judge or jury must determine that the claim exceeds $132,513.28, an amount that the legislature determined is the point beyond which a deductible should not apply. Otherwise, $39,754.31 will be deducted from the claim. When the value of an injured victim's pain and suffering and loss of enjoyment of life does not exceed the amount of the deductible, he or she will not receive any compensation for non-pecuniary damages and may even be required to pay to the at-fault driver's insurance company a substantial portion of its legal defence costs.

Meeting the severity threshold for non-pecuniary damages

Non-pecuniary damages are subject to severity thresholds. Specifically, individuals who have suffered from serious and permanent impairments as a result of a car accident are eligible to recover non-pecuniary damages (subject to the deductible unless the damages are assessed at greater than $132,513.28). Serious and permanent impairments would typically include loss of limbs, paralysis, brain injuries, major orthopedic injuries, serious scarring or other disfigurement, and more. Catastrophically-injured claimants can potentially receive from their own automobile insurers up to $1 million in compensation for medical, rehabilitation, and attendant care benefits, including assessment costs.

Contact a car accident lawyer

This amendment effectively lowers out-of-pocket costs for insurance companies by taking money from injured auto accident victims every year. Working with a lawyer who knows how to deal with insurers could help injured individuals and families get the most for their claims. The team at Lawyers has years of experience in motor vehicle accidents and no-fault auto insurance claims. If you would like to know more about pain and suffering damages and insurance deductibles, please contact our firm for a free consultation.