Ontario government raises deductibles against accident victims

Published: September 14, 2015

Updated: July 24, 2018

Author: Luke Jones



The government in Ontario has been increasingly cutting money for car accident victims and transferring it back to insurance providers, a practice that has been happening for the last five years.

There has been a sharp decline in no-fault accident benefits in that time says the Toronto Sun. To exacerbate the situation, Ontario authorities increased deductibles in the event of one party suing the party/parties at fault after a car accident. The new regulation has caused some anger as it was done silently, with little debate and certainly without prior notice; in other words the government likely knew the regulation would be unpopular amongst consumers.

The new deductibles are aimed at accident victims who are suing at-fault drivers for negligence in the role they played in causing an auto accident.

Only victims who can prove they have suffered a “permanent serious impairment of an important physical, mental or psychological function” are entitled to sue to recover damages not covered by no-fault accident benefits.

To reach this point signed off medical evidence must be provided by the victim to show they have suffered genuine lasting injury.

The prior law stated that any payout to a victim from suing an at-fault driver for injury would be subject to a $30,000 deductible if the awarded amount was less than $100,000. There has always been an issue with this law simply because the deductible was an entirely arbitrary figure and was seen as a way to just take money from victims, sending it right back to car insurance companies.

It meant that a payout of $50,000 to a victim awarded by a judge would result in the insurance provider of the at-fault driver only paying $20,000 after the deductible was removed. Across the board, both now and before, the deductible rule has been kept very quiet, so much so that most drivers do not know about it. More importantly, jurors are also largely unaware as car insurance companies keep the law an almost inside secret in fear payouts would be increased.

The situation has now been made wholly worse by the new regulations announced by the Ontario government last month. Now the deductible has been raised to $36,540, so that $50,000 awarded payout from a jury would result in a $13,460 payout by the insurance company. Victims are being hit further as Ontario has also raised the minimum threshold for the deductible from $100,000 to $121,799.

So, the insurance companies are already the winners in this scenario, and starting January 1st, 2016 (when the new regulation comes into action) they will be winning even more.