Picture this, you have filed a motor-vehicle accident claim, and after years of waiting the case has finally made it to trial. The trial takes place, and the jury presents their award decision. After deliberating, they have calculated your claim to be worth $100,000. You are relieved, but that relief quickly changes to shock as you learn there is a deductible of $41,503.50 that will be taken off your settlement award, making the total settlement $58,496.50. What happened?? Hopefully by this point in the litigation process your lawyer would have explained to you what the rolling deductible is, and why your final settlement ended up being much less than the jury awarded. Thankfully, if you ever find yourself in this position, this article will have informed you of everything you need to know about this deductible, and why it applies to some motor-vehicle accident claims in Ontario.

In 2015 the Ontario government implemented changes to the Insurance Act, the legislation that governs motor-vehicle accidents in Ontario. One significant change made to this legislation was the implementation of a statutory deductible on damages awarded for pain and suffering. As of January 1, 2022, $41,503.50 will be deducted from an award for pain and suffering if the claim is assessed at less than $138,343.86. If the claim is assessed at more than $138,343.86, the statutory deductible does not apply. This amount will continue to increase each year by 1.6% as it is adjusted for inflation.

The shocking implication of this deductible may mean that if you are awarded less than $41,503.50 for pain and suffering, you may not receive any compensation as the award is lower than the deductible. As the example above shows, the deductible can have a significant impact on your damages awarded to you.

It is important to note that damages for pain and suffering (falling under the category of general damages) are the only branch of damages this deductible may apply to. If you have lost income following an accident, you can seek loss of income/loss of competitive advantage damages. If you have incurred increased housekeeping or childcare expenses, you can claim for that. These damages are not subject to the statutory deductible.

Nonetheless, this deductible still has an impact on motor-vehicle accident claims. In theory, it is intended to prevent people from claiming for very minor injuries and causing more strain on the already backlogged and delayed legal system. Unfortunately, many people who are injured in motor-vehicle accidents in Ontario are unaware of the statutory deductible. Worse, in motor-vehicle accident trials, unless jury members are aware of this deductible prior to the trial, they are not informed of it during the trial process. This means that a well-meaning jury may assess your claim for general damages at $130,000 anticipating you will receive close to that in settlement funds, without realizing you will receive approximately $40k less.

For this reason, it is important to consult a personal injury lawyer to discuss all your options and ensure you understand the process of litigating a motor-vehicle accident claim in Ontario. Our team is happy to discuss the implications of this deductible further and provide advice on the specifics of your motor-vehicle accident claim.