2023 Statutory Deductible for Motor Vehicle Accidents in Ontario Increases to $44,367.24

In 1990, Ontario ushered in a new statutory system to govern motor vehicle accidents called the Ontario Motorist Protection Plan. It established a statutory threshold that limited those who could claim for injuries from a motor vehicle accident. At the time, there was no statutory deductible in place. The purpose of the system was to remove minor claims from the legal system and essentially keep insurance premiums at a reasonable level.

In 1994, the Ontario government changed the auto system under what is known as Bill 164.  This added a statutory deductible of $10,000 to reduce non-pecuniary damages. The goal was to remove modest claims from the legal system even if the injuries met the statutory threshold.

In 1996, the Ontario government brought in what is called the Bill 59 regime, which increased the statutory deductible to $15,000 to reduce non-pecuniary damages.

Then Bill 198 came into effect. Under this system, the statutory deductible increased from $15,000 to a whopping $30,000.

Then, the government of Ontario decided to index the $30,000 deductible for inflation. As of January 1, 2023, the statutory deductible has increased by 6.9% from 2022 and is now $44,367.24.

A major issue with an indexed deductible is that it increases each year along with the cost of living. This may be tolerable in low inflationary times and with a more modest monetary deducible. However, given the size of the Ontario deductible and the rate of inflation exploding in recent years, the deductible has now become an unfair burden to those with legitimate injuries. The reality is that the statutory deductible is increasing at an ever-greater rate than awards for damages. Damages in Ontario have remained largely stagnant (especially in jury trials) and are not increasing at the rate of inflation.

Whereas the deductible may have started off as a means to remove modest claims from the system, it is obvious that this is no longer the case. Ask yourself, how fair is it that someone with an injury worth $50,000 in non-pecuniary damages is only entitled to a little over $5,000? The deductible is now creating a barrier to fair recovery and is impacting those with legitimate injuries.

Cui bono? It’s not the Ontario driver. We pay some of the highest insurance rates in the country. It is insurance companies who benefit and will continue to benefit until some sense of fairness is restored to the system.

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