Updated January 2023
If you’ve been injured in a car accident, you may be eligible to file a lawsuit in order to recover compensation for the damages you incurred as part of the accident. Often, these lawsuits are essential to ensuring that your compensation adequately covers the massive financial burdens associated with medical bills, property damage and lost wages following your car accident. Unfortunately, what many people don’t realize is that Ontario law prevents injured victims from recovering the full compensation to which they’re entitled in many instances.
Ontario’s Insurance Act allows the insurance company to keep a certain portion of your pain and suffering damage award as a deductible when your award doesn’t exceed a specified minimum threshold. As a result, a significant amount of the money you need to recover from your injuries remains in the hands of the insurance company instead of where it belongs – with you.
The stated purpose of this law is to reduce the high auto insurance premiums paid by Ontario residents. According to the government report Fair Benefits Fairly Delivered: A Review of the Auto Insurance System in Ontario, individuals in Ontario paid an average auto insurance premium of $1,458 per vehicle in 2015. This figure is significantly higher than the Canadian national average of $930 per vehicle (2015)
There’s no logical reason why auto insurance premiums in Ontario are so much higher than throughout the rest of Canada. Ontario has the largest population of any province, and it also boasts one of the nation’s lowest accident and injury rates. Based on these facts, insurance premiums should be lower than the national average, not more than $500 higher.
While the intent of this law is to help Ontario residents bring their insurance costs more in line with the rest of the country, the primary impact of this law has been to prevent injured victims from receiving the compensation they sorely need during a difficult time in their life.
This statutory deductible has been in place since October 1, 2003. Initially, there was a $30,000 deductible on claims by injured victims if the pain and suffering damage award didn’t exceed $100,000. In addition, there was a $15,000 deductible on claims made by family members when the pain and suffering damage award didn’t exceed $50,000.
However, in the summer of 2015, the Ontario government amended this law in order to account for inflation. As of August 1, 2015, this deductible will rise each year based on the current level of inflation.
January 1st 2023, the statutory deductibles for motor vehicle accidents are:
This can have a significant impact on your settlement. If your pain and suffering damage award is $100,000, you’ll only receive $55,632.76. The insurance company will get to keep the remainder as part of this deductible. The impact is even greater when settlements are smaller. If you’re pain and suffering damages are $50,000, you’ll only recover $5,632.76 after the deductible is withheld!
In addition, if your pain and suffering damages don’t exceed the deductible, you may be required to pay the insurance company’s legal costs. So in the event that your pain and suffering damages award are only $44,000, you’ll not only receive no money, but you’ll be forced to pay legal costs for the insurance company. This hardly seems like a fair way to compensate injured victims.
To add insult to victims, lawyers are not allowed to inform any jury members in court about these insurance deductibles at trial. The Court does not want jury members to increase the amounts of damage awards to account for the deducible, allowing victims to avoid paying the insurance companies.
Due to the harsh implications of this law, it’s crucial that you work with an experienced Ontario car accident lawyer who can help you maximize the value of your pain and suffering damages. Otherwise, your final insurance award may not be sufficient to cover all of your expenses.
Please contact Findlay Personal Injury Lawyers using the form on this page or call 905-522-9799 today to schedule your free car accident consultation. We serve clients in Hamilton, Brantford, Burlington, Stoney Creek, Niagara Falls and the surrounding areas of Ontario.
Disclaimer: The information throughout this website is not intended to be taken as legal advice. The information provided by Findlay Personal Injury Lawyers is intended to provide general information regarding personal injury law, catastrophic injury cases, wrongful death claims, medical malpractice lawsuits, car accidents, truck accidents, motorcycle accidents, and more for residents of Hamilton, Burlington, Stoney Creek, Brantford, Niagara Falls, and nearby areas in Ontario. This website is not intended for viewing or usage by European Union citizens. If you are interested in learning more about our law firm, please contact us for a personal consultation.