Threshold for Motor Vehicle Accidents

New changes in Ontario law may make insurance companies bolder and less likely to settle a motor vehicle accident claim on terms that a claimant may need for a full recovery. This means that it is now more important than ever to seek advice from a personal injury lawyer.

Many Ontario residents are aware of the no fault insurance systems that we have for motor vehicle accident. To summarize very generally, a driver may be entitled to some form of compensation through their own insurance even if they are at-fault for the accident. Any victim of a motor vehicle accident (including dependents and certain relatives of someone injured in a motor vehicle accident) may be eligible for accident benefits.

The circumstances of the accident will dictate which insurance policy is responsible for compensating a claimant for accident benefits to cover medical and rehabilitative care, non-earner benefits, income replacement, and other benefits that may be paid for and made available as optional benefits such as housekeeping or care-giving.

Drivers who are not at fault, as well as passengers, are entitled to compensation through a tort claim for damages such as pain and suffering, medical costs, out of pocket expenses and lost income.

This article is going to specifically address the general damages aspect and what limitations a claimant may have on pain and suffering damages when making a tort claim.

There is a threshold  in order to claim for pain and suffering in a motor vehicle accident claim

If you get into a car accident, and are suing the negligent driver for pain and suffering caused by the accident, you will need to meet the threshold test and prove that your accident injuries have caused you to suffer either:

  1. A serious and permanent impairment of an important physical, mental or psychological function; or
  2. A serious and permanent disfigurement, such as extensive scarring.

A serious impairment prevents you from returning to your employment prior to the accident or causes a significant interference with your activities of your daily, normal life.

An impairment is considered permanent if it is unlikely to significantly improve in the foreseeable future.

If you sue for a motor vehicle accident, there may be a $36,540 deductible taken from your award.

Any accident after August 1, 2015, is subject to a higher deductible of $36,540 for motor vehicle accident personal injury claims, and $18,270 for Family Law Act Claims.

For accidents that arose prior to August 1, 2015, the deductible is still $30,000 for a motor vehicle accident personal injury claim unless it is worth more than $100,000.

The only way to avoid this deductible is if you can prove that the pain and suffering value of the claim is worth at least $121,799 for a motor vehicle accident claim or $60,899 for a Family Law Act claim.

In other words, let’s say that your lawyer takes your case to trial and you are awarded $70,000 in general damages like pain and suffering for your motor vehicle accident. Your damages will be reduced by the deductible, which means you will be left with $33,460 for your pain and suffering. This does NOT include legal fees for your lawyer. Assuming a 30% contingency fee, you will be walking away with $10,038 for pain and suffering.

What can we learn from this change in legislation?

  • New changes in Ontario law may make insurance companies bolder and less likely to settle a motor vehicle accident claim on terms a claimant may need for a full recovery. This means that it is now more important than ever to seek advice from a personal injury lawyer.
  • Sadly, some claims may not be worth pursuing in court. Once again, a personal injury lawyer is the best professional to ask if pursuing your injury claim after a car accident will be worth it to you.
  • This legal information refers to pain and suffering damages only. You may still have a decent claim if you have other heads of damages such as lost income and out of pocket expenses.

My Thoughts

Upon my return from Australia, this new change in the law has deeply upset me and I can imagine how the legal rights to compensation for many victims of a car accident will now be prejudiced due to this change.

Initially, these reforms are made to account for inflation, yet the benefits a claimant may receive under the Statutory Accident Benefits Schedule (SABS) still remain the same (e.g. it is still only $400/week maximum for income replacement benefits unless you purchase extended insurance.)

Another thought is the long term purpose of these reforms, to address for fraud claims and to ‘help’ consumers by assisting insurance companies to provide lower premiums. However, premiums have skyrocketed over the last few years and I can never imagine any financial consumer benefit to trickle down from a company whose main objective is for profit.

Basically, this legislation has given the insurance companies more cards against claimants and will be a ridiculously effective method to fear-monger claimants into avoiding trial.

Now, some argue that this prevents nuisance claims from arising. However, from my experience, it is not the liars and fraudsters who are affected, but rather the honest hardworking people who fall on the line that get screwed. For example, imagine a single mother with children and working two jobs getting into a car accident that results in whiplash injuries and chronic pain from musculoskeletal injuries (but no broken bones). Her pain may very well prevent her from working. However, pain is a very subjective issue that is difficult to encapsulate in medical records. She may very well be unable to support herself until the trial process (which may take at least 2 years).

At the end of the day, any legislation that narrows access to justice isn’t necessarily bad. We would hope that such reforms are simply society addressing a larger issue (and not just brilliant lobbying from insurance companies). Yet, if personal injury continues to move in this direction, extended insurance coverage may be more important than ever (which may ironically be part of the plan all along.)

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