For years, accident victims have had their general damages claims automatically reduced by a deductible.
How does this deductible work and what does it mean?
Let’s consider two scenarios:
- Imagine for example that you slip and fall on a sidewalk, you break your arm and you decide to sue for pain and suffering damages. Imagine further that your pain and suffering damages are assessed as being worth $30,000.00. In this case you would receive damages in the amount of $30,000.00.
- Let’s look at a different scenario, imagine that it is before August 2015, and that you are in a car accident you break your arm and you decide to sue for pain and suffering damages. Imagine further that your pain and suffering damages are assessed as being worth $30,000.00. In this case your pain and suffering damages would be reduced to zero.
The only difference between scenario A and B is the fact that one is a slip and fall and the other is a car accident. The injuries are exactly the same but the compensation is dramatically different.
The same type of deductible is applied to the Family Law Act (FLA) Claims of the family members of car accident victims.
There are limits (called thresholds) when the statutory deductible does not apply. Until August 1, 2015, General Damages exceeding $100,000.00 were exempt from the deductible. For Family Law Act claims, amounts exceeding $50,000.00 were exempt from the deductible.*
Most people would agree that this is unfair because the limits are so high. Unfortunately, it just got worse.
The Ontario government has introduced changes to Ontario Regulation 461/96 which increase both the statutory deductible and the threshold limits at which the deductible does not apply. The amendments to the regulation came into force on August 1, 2015. The government intends to increase both these amounts on annual basis to account for inflation.
The changes are outlined in the chart below:
|Old Statutory Deductible||New Statutory Deductible – Effective August 1, 2015|
|General Damages: $30,000.00||General Damages: $36,540.00|
|Deductible Threshold: $100,000.00||Deductible Threshold: $121,799.00|
|FLA Damages: $15,000.00||FLA Damages: $18,270.00|
|Deductible Threshold: $50,000.00||Deductible Threshold: $60,899.00|
These changes benefit private auto insurers by reducing the amount of claims money they need to pay to innocent accident victims.
While these changes are implemented by the provincial government, it must be remembered that they do not benefit the people of Ontario or the government itself, and they certainly do no favours to accident victims who struggle to rebuild their lives after an accident and are now forced to do so with much less compensation.
*The deductible does not apply to FLA Claims in cases involving a fatality.