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New Changes to Deductibles for Car Accident Claims in Ontario effective August 1, 2015

This Civic Holiday was a time to relax, enjoy time spent with the family, along with some nice weather….For most.

For insurers and the Ontario Government, it was a time to reign in some new changes to the Insurance Act which were swept under the rug. Unbeknownst to Ontario drivers, the value of the pain and suffering and their injuries following a serious car accident claim have been diminished yet again at the behest of large, deep pocketed insurance companies.

So; what are these changes of which I speak?

Many of you may not know this, but there is a deductible for pain and suffering claims (tort) following a car accident.

Back in the 1970’s there was no such deductible. This meant that you could sue, and recover compensation at law for large injuries and for smaller ones. If the accident wasn’t your fault, and you got injured, chances are you would be able to recover some form of compensation for your pain and suffering.

After the introduction of no fault insurance in Ontario, a deductible and a threshold were both introduced in order to limit the recovery of accident victims in the guise of saving insurers money on claims. The hope was that fewer claims would be advanced, thereby reducing the expenses for insurers. Those savings were supposed to be passed along to the consumer in the form of lower car insurance rates. That deductible has soared from $10,000; to $15,000; to $30,000.

So what’s the significance of the August 1, 2015 date?

Any accident AFTER August 1, 2015 will be subject to a higher deductible than the $30,000 we have been used to for the past few years. This all took effect via that Statutory Accident Benefits Schedule (“SABS”).

The deductible for pain and suffering claims is now set at $36,540 for personal claims and $18,270 for Family Law Act Claims. In order to escape the deductible, the value of the pain and suffering claim has been increased from $100,000 up to $121,799 for personal claims and to $60,899 for Family Law Act claims.

This means that if you and your lawyer go to trial, and the judge likes your case, and awards you $50,000 for your pain and suffering in a car accident case; that award will be reduced by $36,540; leaving you with just $13,460.

If that same Judge awards you $35,000 for your pain and suffering claim; your award after the application of the $36,540 deductible is NIL! In that scenario, despite winning $35,000 at trial, you would actually have LOST the case because you’d likely have to end up paying the insurance company their legal costs. This doesn’t seem right at all, but it’s now the law.

The rationale to raise the deductible was to keep up in line with inflation. I have always found it odd that he statutory deductible for pain and suffering claims increases for inflation; yet the standard rate under your average, run of the mill car insurance policy for income replacement benefits has remained at $400/week for over a decade and has NOT increased to account for inflation. Those insurers essentially got the benefit both ways at the cost of Ontario motorists like you and me.

Worst of all is that insurance rates in Ontario have NOT decreased. Have your rates decreased over the past 5 years? I travel all over the Province; probably MORE than the Premier. In my travels, I have not encountered a single person who has told me that their rates have DECREASED. Those rates have either stayed the same, or increased. This has all come with a deterioration of accident benefits, and a reduced capacity to pursue a claim through our civil justice system. The entire time, insurers have been recording record profits at your expense.

And here’s another kicker. Soon: you will NOT be able to sue your own insurance company in civil court before a Judge and Jury for an accident benefit claim. You will be forced to have your dispute heard before the License Appeal Tribunal or LAT. LAT hears a wide variety of disputes dealing with such things as:

  • The Payday Loans Actblue_jay_glamour
  • The Real Estate & Brokers Act
  • The Vinters Quality Alliance Act
  • The Liquors License Act
  • The Day Nuseries Act
  • The Funeral, Burial and Cremation Services Act

Go figure that all accident benefit and car insurance disputes are now going to be heard by this mish mosh tribunal. Currently, those dispute are being heard by the Financial Services Commission of Ontario. They essentially deal almost exclusively with insurers and insurance disputes. This seems like a logical place to hear car accident and insurance disputes. Soon, FSCO will no longer hear those dispute and they will all be transferred to LAT to be heard amongst all sorts of things which are not related to car insurance and personal injury claims arising from motor vehicle accidents. Genius?

Enough law talk about thresholds and deductibles? Sure. I’d like to focus now on Toronto’s baseball club. They haven’t made the playoffs in 22 or so years. They have been largely insignificant in the Toronto sports scene. Recently, Toronto made some major moves to shake up the roster and become somewhat relevant for the first time since the 1993 season. How relevant are they? Well, I just spend some time on the Canadian West Coast; and I can tell you that every TV Screen was airing the baseball game. People in the streets were all wearing Toronto gear, and excited to see how the team would perform. The baseball team was a big deal for people on the west coast. It just goes to show that Canada loves it’s national baseball team and if you build a winner; or a contender for that matter, people will watch and rally behind it. The buzz in Toronto and across Ontario has been excellent. I just hope this team can perform and break that playoff drought. It would be nice if the SkyDome were sold out night after night with people from far and wide from across Canada. I love it when the SkyDome is the place to see and be seen, just like it was in the early 90’s. Touch em all Joe…


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