2024 Increases to Statutory Deductibles, and Monetary Thresholds

2024 Increases to Statutory Deductibles, and Monetary Thresholds

If you are the victim of a motor vehicle accident, the Insurance Act in Ontario will govern your claim for recovery against the at-fault parties. In the case of a car accident, Section 267.5(5) of the Insurance Act stipulates that in order to recover monies for general damages, also known as “pain and suffering”, you must meet the following legal threshold test:

Section 267.5(5):

Despite any other Act and subject to subsections (6) and (6.1), the owner of an automobile, the occupants of an automobile and any person present at the incident are not liable in an action in Ontario for damages for non-pecuniary loss, including damages for non-pecuniary loss under clause 61 (2) (e) of the Family Law Act, from bodily injury or death arising directly or indirectly from the use or operation of the automobile, unless as a result of the use or operation of the automobile the injured person has died or has sustained,

• (a) permanent serious disfigurement; or

• (b) permanent serious impairment of an important physical, mental or psychological function. 

1996, c. 21, s. 29; 2011, c. 9, Sched. 21, s. 3 (3).

To make matters even more complicated, if your injuries and impairments surpass this legal threshold, you may then be subject to a statutory deductible, which is fixed by the Financial Services Regulatory Authority of Ontario (“FSRAO”),  and increases annually with inflation. FSRAO has recently announced the increased figures for 2024, and they are summarized as follows:

There are only two exceptions in which the statutory deductible does not apply, and they are:

• The award for pain and suffering exceeds the prescribed monetary threshold amount; or

• The claim is advanced under the Family Law Act and involves a fatality.

To better understand how the deductible applies as of January 1, 2024 and until December 31, 2024, consider the following examples:

Scenario 1: An injured party is awarded $100,000.00 for pain and suffering. Because this amount does not exceed the monetary threshold, theirrecovery is reduced by a deductible of $46,053.20, thereby resulting in anaward to them of $53,946.80. 

Scenario 2: An injured party is awarded $200,000.00. Because this amount doesexceed the monetary threshold of $153,509.39, their recovery is not reducedby a deductible, and their award remains at $200,000.00.

Scenario 3: The family member of a loved one injured in a motor vehicleaccident advances a claim under the Family Law Act for loss ofguidance, care and companionship, and they are awarded $50,000.00. Becausethis amount does not exceed the monetary threshold, their recovery isreduced by a deducible in of $23,026.61, thereby resulting in an award tothem of $26,973.39.

Scenario 4: The family member of a loved one in a fatal motor vehicle accident advances a claim under the Family Law Act for loss of guidance, care and companionship, and they are awarded $50,000.00. Because this claim involves a fatality, no deductible is applied.

The monetary thresholds and statutory deductibles increase annually, and the insurers directly benefit from these increases as they serve to reduce their financial exposure to injured victims whether in the context of negotiation or trial. This financial and legal advantage for the insurer creates complexities that can be diminished through strong advocacy by highly skilled and experienced personal injury lawyers. At JSM Law we take tremendous pride in our success in closing this gap and helping our clients navigate what is otherwise a very complex, and at times, difficult process.

JSM Law is experienced in all aspects of personal injury and medical malpractice litigation. We have the confidence and skill to advance your accident or medical malpractice claim to settlement or trial while helping you navigate complex medical, legal, and insurance issues.

If you or your loved one has been injured in a motor an accident, reach out to a personal injury lawyer at JSM Law to understand if you have a claim. Please contact any of our personal injury lawyers at JSM Law for a free consultation.

Contact a personal injury lawyer near me by calling 1-855-576-5291 or send an email to reception@jsmlaw.ca with your inquiries.