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New Year Ushers in Higher Statutory Deductibles
The new year has ushered in higher statutory deductibles in personal injury cases involving automobiles. The Financial Services Regulatory Authority of Ontario (FSRA) published its updated list of statutory deductibles and monetary thresholds which continue to negatively impact survivors of auto accidents.
Effective January 1, 2021, the statutory deductible for pain and suffering damages has increased from $39,556.53 to $39,754.31.
You may be wondering how this affects you if you have been injured in an auto accident. As I explained in my February 14, 2020 blog, if you suffer injuries due to the fault of the driver of an automobile (whether you are also driving an automobile, or a passenger in one, or 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 $39,754.31 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 $39,754.31 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, has increased to $132,513.28 (it was $131,854.01 in 2020). In other words, if you settle your claim in 2021, if your damages are assessed at $135,000.00, you would get 100% of your pain and suffering damages – $135,000.00; however, if you damages are assessed at $130,000.00, the deductible is assessed, which means you would get $130,000.00 less $39,754.31, for a net damage award of $90,245.69.
Most Ontarians do not know this, and if you claim goes to trial and it is in front of a jury, 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 $39,754.31 of the injured person’s pain and suffering damages unless those damages are assessed at a value higher than $132,513.28.
Here is the added problem that, when I wrote my article on this subject last February, was not quite on the radar. With the pandemic officially striking Ontario and a state of emergency declared on March 16, 2020, civil trials have been delayed by months and in most cases years, and 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 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.