Everyone wants a deal. Bargain hunters looking for deep discounts should look no further than Ontario’s Car Accident System. That’s not to say that purchasing car insurance is cheap. It’s to suggest that car insurers get deep discounts when defending a car accident case. In fact for each case that’s started a car insurance company receives around a $40,000 discount; give or take.
Why would you think about car accidents as a commodity. It’s not like a car accident is a product to be sold and worn like a brand new jacket, a sweater or a pair of pants you’ve just purchased off the sale rack.
But perhaps we should look at car accident cases more as a commodity so that we can better understand how insurers save big bucks on each and every car accident case in Ontario.
The way the laws for car accident cases are set up in Ontario is unfair. Those laws provide more protections to the at fault driver, than they do the injured Plaintiff.
For starters, the injured Plaintiff’s injuries (regardless of fault), must meet a medico-legal test or threshold. If the test is not met, then the injured Plaintiff receives zero dollars for his/her pain and suffering.
If the injuries are not deemed by the Judge to present both a “serious and permanent impairment of an important bodily function“, then the Plaintiff won’t be entitled to general damages for their pain and suffering. That means that regardless of fault; meaning the at fault driver could have been drunk, smoking drugs and on his/her cell phone; if the injuries don’t meet that medico-legal test; then the Plaintiff’s claim for pain and suffering will fail.
What’s even crazier is that the personal injury lawyer can’t even discuss this concept to the jury. It’s a big SECRET at trial! Why would we keep secrets at trial? Because the system is unfair to accident victims; that’s why. By keeping the jury in the dark about these legal concepts, the true will of the jury’s decision is ignored.
If a jury intends to award a Plaintiff $75,000 for his/her pain and suffering in a car accident case; then why isn’t $75,000 awarded to the Plaintiff? Why isn’t the Jury told about the concept of the deductible at trial so that their will can be aligned with the state of the law? Why are we over riding the will of the jury in these trials?
Back to the concept of insurance companies receiving bargain basement discount prices on car accident cases.
Let’s take the example of one at fault driver with policy limits of $1,000,000. The Defendant driver is involved in a serious car accident with another vehicle whereby the Defendant injures a family of 4 people.
Each person’s claim is subject to a $40,000 deductible. This number is rounded up from the $39,754.31 currently allocated in 2021. So, right off the bat, the insurer is getting around $160,000 in discounts off the full value of the claim when applying the deductibles x 4.
In what world is an insurance company given a credit of $40,000 per claim, yet their exposure on the claim doesn’t change. It remains static at the policy limit of $1,000,000. This figure does not change regardless of the amount of claims against the insurer. There is no consideration for the Defendant insurer gaining all of these discounts ($40,000/claim) while the overall maximum of exposure of the claim does not change and remains at the policy limit of $1,000,000.
It would make sense if while the deductible of $40,000 applied per claimant; each claimant would have access to their own set of policy limits of $1,000,000. But that’s not the case in Ontario. Each claimant regardless of how large the deductible is only able to recover on the on set of policy limits available. What it does is create a situation whereby there are competing claims. Each Plaintiff is now fighting with each other over how much of the $1,000,000 policy limit they are entitled to; despite the fact that the insurer receives a $40,000 credit per claim.
When Plaintiffs are competing against one another for the largest piece of the policy limits in a battle of “who is injured the most“; it creates a very toxic litigation environment. Even worse is how the litigation plays itself out. Insurance companies aren’t in the habit of settling one case, without settling the other cases. They will only do this if the Plaintiffs agree to limit their claims to the policy limits so as not to personally expose the people who they defend (their insureds). Most Plaintiffs won’t agree to limit their respective claims to the policy limits because what those policy limits are is just $1,000,000 with competing claims for that $1,000,000. The more Plaintiffs competing, the less money potentially available for each competing claim.
So on one hand you have a decreasing resource in the form of the $1,000,000 policy limit. In contrast you have a $40,000 multiplier which the insurer is entitled to per claim. The more claimants, the more deductible credits the insurance company is entitled to.
I am not aware of any other industry where ordinary peoples’ rights are swept to the curb and usurped by the economic rights of large, deep pocketed insurance companies. The laws are stacked in their favour; when it really ought to be the other way around. The laws should protect the rights of innocent accident victims instead of trying to extinguish those rights as constructed under the current system.
The more which people know about how unfairly innocent accident victims are treated under Ontario law; the better. But few people seem to care because it doesn’t impact their everyday lives; until that one day that it does. And when that day comes and people wake up to how the insurance industry has manipulated the laws in their favour; it’s very hard to digest.
When people call our office wanting to sue an at fault driver for their negligence and we explain to them how the law works in Ontario; it can be very upsetting and eye opening in a bad way.