Personal injury lawyers criticize Ontario's statutory deductible

In the early 1990s, as part of an effort to implement no-fault insurance in Ontario, the provincial government announced a $10,000 statutory deductible on compensation for general damages incurred in motor vehicle accidents. The goal was to discourage lawsuits for minor injuries with the expectation that newly available accident benefits would make up for lost awards.

When it was introduced, many personal injury lawyers saw the deductible as an acceptable price to pay for no-fault insurance – but times have changed. A recent Ontario Trial Lawyers Association (OTLA) blog post called the statutory deductible “the law that may be most frequently used to punish innocent accident victims in Ontario to the benefit of bad drivers and their insurers.”

What are General Damages?

When a person is injured in a motor vehicle accident, they have the right to seek compensation for their pain and suffering. This type of compensation is referred to as general damages; in some cases, it may be the only form of compensation that the plaintiff seeks.

What is a Deductible?

From an insurance perspective, a deductible is an amount of money that policy holders must pay before the insurance provider contributes. For example: if your car incurred $1,000 worth of damage in a fender-bender and your insurance policy included a $500 deductible, the insurer would contribute just $500 toward repairs.

The statutory deductible works the same way. If you incur general damages valued at $100,000 in a motor vehicle accident, you will only receive $62,000 in compensation. Or, if your damages are calculated at less than $37,500, you risk walking away with nothing.

Please note: the statutory deductible only applies for awards of less than $126,610.07.

The Main Issue

At the heart of personal injury lawyers’ opposition to the statutory deductible is its growing imbalance with general damages awards, which have not risen in unison with the deductible, and available accident benefits, which have been significantly reduced in recent years.

“The deductible has grown considerably, while benefits are shrinking considerably, which I find very concerning,” one Ontario personal injury lawyer told Law Times in November. “While I appreciate quick access to medical benefits means better outcomes, when that amount is only $3,500 for most people, it’s not possible to get adequate treatment and set yourself on the path to recovery.”

Additionally, the Province of Ontario’s threshold test for personal injury lawsuits largely accomplishes what the statutory deductible was intended for: to limit civil action over minor injuries.

An Ontario Personal Injury Lawyer Can Help

If you’ve been injured in an automotive accident, contact Neinstein Personal Injury Lawyers today to arrange a free, no-obligation consultation. Our experienced team of Toronto personal injury lawyers has been assisting seriously injured accident victims for decades, and can provide guidance and advice as you travel the road to recovery.