January 24, 2023, Kitchener, Ontario
Posted by: Robert Deutschmann, Personal Injury Lawyer
In Ontario awards made for pain and suffering under the Insurance Act are subject to a deductible that is paid back to the insurance companies. This deductible is tied to inflation. Interestingly benefits paid to injured people making claims under the SABs are not.
The Financial Services Regulatory Authority of Ontario (FSRA) announced the latest increase to the deductible in December.
What is the Statutory Deductible?
This deductible is the amount the insurance company will withhold or deduct from your award for pain and suffering resulting from a motor vehicle or car accident. This deductible amount is also applied to any amounts that a family member might claim under the Family Law Act for damages.
The deductible for pain and suffering damages has now increased from $42,503.50 in 2022 to $44,367.24 in 2023. The deductible for claims under the Family law act also increased from $20,751.76 to $22,183.63.
Is there a Monetary Threshold?
There is a threshold established for the elimination of the deductible which has increased dramatically. In 2022 the threshold for the deductible for non-pecuniary damages was $138.343.86. For 2023 this amount has increased to $147,889.59 from the 2022 amount of $138,343.86. The Family Law Act deductible has also increased from $69,171.36 to $73,944.18 in 2023.
What does this mean to you or an injured loved one?
The increase in the statutory deductible means the insurance industry is victimizing injured individuals a second time. For example, if you are seriously injured and are awarded pain and suffering damages in a settlement for $80,000 then you have not met the monetary threshold for deduction and the insurance company will take $44,367.24 back. This leaves you with a fraction of the settlement amount of $35,632.76. From this amount, you will still have to pay legal fees. The deductible amount is calculated in the year the settlement is made, not in the year the accident happened or the year that you began your legal suit. Given the long delays in many injury lawsuits, this can have significant impacts on the real amount of the settlements awarded.
Why does this happen?
Insurance companies have had a strong political lobby historically. Governments have long tried to reign in insurance premiums and have acted in the interest of the insurers rather than the most vulnerable consumers to keep rates low.
What does this mean?
The deductible amount is not allowed to be disclosed by lawyers to a jury if the case moves to the court which often results in very minimal rewards being paid to the injured individual and their family. Most Ontarians do not even know this exists. It is difficult to understand why the interests of the insurers come before those of the victims.
What can I do?
Know your rights under the law. Contact your provincial member of parliament and complain. Make sure that you have the maximum insurance coverage that you can have to protect yourself and your family in the event of an accident.
What if I am hurt in a car accident?
If you are seriously injured in a motor vehicle accident, contact an experienced personal injury lawyer immediately here at Deutschmann Law for a free initial consultation. Don’t face your situation alone and uninformed. Call us first 1.519.742.7774