2022 Ushers in Much Higher Statutory Deductibles

Survivors of automobile accidents continue to be penalized in Ontario.  Effective January 1, 2022, the statutory deductible for pain and suffering damages awarded to survivors of automobile accidents jumps from $39,754.31 in 2021 to $41,503.50 in 2022. It will remain in effect until December 31, 2022, when it will increase again on January 1, 2023. 

The Financial Services Regulatory Authority of Ontario (FSRA) is  required, pursuant to the Insurance Act,[1] to publish revised deductibles and monetary thresholds for pain and suffering damages (non-pecuniary damages) and Family Law Act[2] damages on the FSRA website, effective the 1^st day of January of each year after 2015.  These deductibles are tied to inflation.  As inflation climbs, so will the deductibles.

You may be wondering how this affects you if you have been injured in an auto accident.  As I explained in my 2020 and 2021 blogs regarding the deductibles, if you suffer injuries due to the fault of the driver of an automobile (whether you are also driving an automobile, or are a passenger in one, or are a pedestrian or cyclist, for example), your compensation for pain and suffering is subject to a number of limitations, including a statutory deductible.  Unlike the deductible for property damage to your vehicle, you do not pay this deductible out of pocket.  Instead, the insurance company for the at fault party (in other words, the insurer for the person who hits you and causes your injuries) gets to keep the first $41,503.50 of your damages for pain and suffering.

Yes, that is right…the insurer of the person who was negligent and caused the harm gets to keep the first $41,503.50 of your pain and suffering compensation. 

As well, there is a monetary threshold that is subject to annual indexation. The monetary threshold means that damages assessed at a certain level will not be subject to the deductible.  That monetary threshold, in 2021, was already $132,513.28; however, because of climbing inflation, that threshold jumps to $138,343.86.  In other words, if you settle your claim in 2022, if your damages are assessed at $140,000.00, you would get 100% of your pain and suffering damages – $140,000.00; however, if your damages are assessed at $135,000.00, the deductible is applied, which means you would get $135,000.00 less $41,503.50, for a net damage award of $93,496.50. 

Most Ontarians do not know this, and if your claim goes to trial and it is in front of a jury (which, incidentally, are facing severe delays of years due to the pandemic), we cannot advise the jury of the deductible or the monetary threshold.  

Yes, that is right… while everyone is sworn to tell the truth, the whole truth and nothing but the truth in a court of law, there is an exception, and that exception is that we are barred from educating the jury that the at fault party is (a) insured by an insurance company and (b) that the insurance company gets to keep $41,503.50 of the injured person’s pain and suffering damages unless those damages are assessed at a value higher than $138,343.86.

Furthermore, we are now two years into the pandemic, which has caused significant delays for civil trials. Civil jury trials have virtually vanished from the system (as there is no real way to assemble a jury in a safe way given COVID-19).  Despite this, the deductibles and the monetary thresholds continue to increase annually.  Injured plaintiffs are not responsible for the delays in the civil justice system but they are the ones who must suffer increasing losses due to the annual indexation of the deductibles and monetary thresholds, while the insurers reap the benefits.  Delays in the system benefit insurers and their shareholders; they harm accident victims.

The system is not fair.  Know your rights. 

This article was written by a member of the Personal Injury Team at McKenzie Lake. If you require assistance with a personal injury matter or wish to speak to a personal injury lawyer at McKenzie Lake Lawyers LLP, please call (519) 672-5666.

[1] R.S.O. 1990, c.I.8, as amended.

[2] R.S.O. 1990, c.F.3, as amended.