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Published January 13, 2021

By Sophie Luesby, LL.B.

When pursuing a possible tort claim for injuries or damages sustained during a motor vehicle accident, it’s important to understand the deductibles involved. The compensation awarded relies heavily on the extent of your injuries. As a result, once you subtract the deductible from your compensation, many cases are no longer considered financially viable.

However, you can add additional coverage to your automobile insurance that reduces the deductible associated with court awarded compensation. Below we’ll discuss the thresholds that must be met, the deductibles, and how to add additional coverage to your insurance.

Statutory Deductible

Say you were injured in a motor vehicle collision in Ontario for which you were not at fault, and you have the right to seek compensation from the at-fault driver. Your right includes seeking compensation for various “heads of damages”. These include past and future loss of income or competitive advantage, out-of-pocket expenses, past and future expenses for medical rehabilitation, attendant care expenses, and housekeeping expenses. It further includes a right to seek compensation for pain and suffering, or what is commonly known as “general damages” or “non-pecuniary losses.”

In order to be successful in a claim for general damages after a collision in Ontario, a plaintiff needs to meet or exceed a certain “threshold” established by the province. The threshold is described in Section 267.5 (3) and Section 267.5 (5) of the Insurance Act (Ontario). It states:

In order for there to be liability arising from injuries sustained in a motor vehicle accident, the injured person must have either died or sustained:

  1. Permanent serious disfigurement; or
  2. Permanent serious impairment of an important physical, mental, or psychological function.

To meet the threshold, then, a plaintiff must pass the “threshold test”.

Threshold Test

In order for your injuries and impairments to be considered “serious” as described by the threshold test, they must either prevent you from returning to your pre-collision employment or cause significant interference with your daily activities.  

In Ontario, most motor-vehicle cases are tried by a jury. It is for the jury to decide how much compensation a plaintiff should receive for general damages. The judge will then apply the statutory deductible on the amount decided by the jury. Currently, the deductible amount is $39,754.31 on awards for general damages that do not exceed the 2021 threshold of $132,513.28. The jury is not aware of the deductible, and we cannot tell the jury about it.

Insurance Act Section Description Threshold Deductible
267.5(8.3) Non-pecuniary loss $132,513.28 $39,754.31
267.5(8.4) Family Law Act claims $66,256.09 $19,877.16

As a result, this deductible affects the financial viability of a possible tort claim. These tort deductibles, which were first introduced in 1996, were intended to reduce the litigation of minor claims. However, they have also been heavily criticized, as many have argued that they impede access to justice.

This is why it is important for consumers of automobile insurance policies to know that they have the option to purchase optional policy endorsements.

Optional Policy Endorsements

Additional optional enhancements, also known as policy endorsements or Ontario Policy Change Forms (OPCF), are special agreements that allow you to change, add or reduce the amount of coverage for certain situations.

Added Coverage to Offset Tort Deductibles (OPCF 48):

The Added Coverage to Offset Tort Deductibles (or OPCF 48) endorsement reduces the deductible associated with court awarded compensation for pain and suffering by $10,000 for non-Family Law Act claims and by $5,000.00 for Family Law Act claims.

This could potentially mean the difference between a financially viable tort claim and one that would simply not be worth pursuing.

It is important for consumers looking to purchase or renew their automobile insurance to ask to review the optional accidents benefits available to them and to give consideration to these various Ontario Policy Change Forms.

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