Ontario’s “Secret Deductible” for Car Accident Damages

Most people are shocked to find out that Ontario insurance companies are given a $44,000 “secret deductible” when seriously injured car accident claimants are awarded pain and suffering damages.

This money is taken from the total amount of non-economic damages—such as serious and permanent chronic pain or injuries to extremities—that an injured person receives. It does not apply to economic damages, such as medical expenses or lost wages, or to damages awarded when the accident injuries are catastrophic.

Impact on compensation

The deductible is often referred to as “secret” since it is not widely known by the public. It can have a big impact on how much compensation an injured person can receive. Set by the government and adjusted annually for inflation, the 2023 deductible amount is $44,367.24 for damages that are no greater than $147,889.59.

However, the number of people who receive a higher payout than that is low and is often less than $150,000. This means that someone who is awarded $50,000 in damages by a judge or jury could end up with just a few thousand dollars after the defendant’s insurance company takes its deductible. They also have to pay for legal fees.

The good news is that a claimant who is awarded more than the threshold amount will be able to keep the entire award.

Reducing insurance costs?

The deductible’s purpose was meant to reduce insurance costs for Ontario drivers by discouraging people from pursuing claims for minor injuries or non-economic losses. But critics say it affects low-income people and those who have less severe injuries and has not kept insurance costs down.

To find out how the deductible could affect your damages claim if you have been injured in a car accident in Ontario, consult with a personal injury lawyer. Contact us today to arrange for a free consultation.