There’s a $40,000 deductible if you receive a pain and suffering award – What’s that you ask?

March 10, 2020, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer

If you are hurt in a car accident and are awarded a pain and suffering payout your insurance company immediately takes $39,556.53 right off the top of the settlement. To be clear, they just take it. It’s taken before any other costs are deducted from the amount. The first deductible was set in 1993 at $10,000 with the intent of eliminating frivolous claims. In 1996 the government increased it to $15,000 and it has increased steadily ever since.

From our annual Survey on Auto Insurance, and from other polls done in Ontario it si very clear that most drivers are not aware of this cash grab on the part of insurers.

Interestingly under the Ontario Insurance Act, the deductible for non-pecuniary damages – awards for pain and suffering, went up to almost $40,000 and applies to any settlement below $131,854.01. It is notable that while this amount is indexed, the amount awarded to injured auto accident victims called the Income Replacement Benefit (IRB) is NOT indexed and the max amount payable of $400 a week has not changed in many, many years.

What does this all mean? It means that if you have an injury and get an award for pain and suffering of less than $39,556.53 then you get no money. Even if the case goes to court in front of a jury this remains true. Juries are prohibited from being informed of this deductible amount. Proving your case is not easy, and requires that you show you have suffered a permanent and serious injury that affects your quality of life for the rest of your life.

As a result, many personal injury lawyers won’t accept cases with low award potentials as the client will not get any money in pocket for their pain and suffering even if they prove their case and win.

Insurers do not readily hand out this information to their insureds, and it appears that along with most of the population, our politicians aren’t aware of this clause either.

About Deutschmann Law

Deutschmann Law serves South-Western Ontario with offices in Kitchener-Waterloo, Cambridge, Woodstock, Brantford, Stratford and Ayr. The law practice of Robert Deutschmann focuses almost exclusively in personal injury and disability insurance matters. For more information, please visit www.deutschmannlaw.com or call us at 1-519-742-7774.

It is important that you review your accident benefit file with one of our experienced personal injury / car accident lawyers to ensure that you obtain access to all your benefits which include, but are limited to, things like physiotherapy, income replacement benefits, vocational retraining and home modifications.