If you are injured in a car accident caused by someone else, your right to claim compensation for pain and suffering is reduced by a deductible of $39,556.53. What does that mean? It means that the insurance company for the driver who caused the accident gets to keep the first $39,556.53 of the compensation awarded to you by a judge or jury to compensate you for your pain and suffering. That’s right – the insurance company for the AT-FAULT DRIVER keeps the first almost $40,000.00 of your compensation.

This is the case even if you are not in a car. If you are a pedestrian or cyclist and you are hit by a car, the car insurance company keeps that deductible. Even if you are hit by a drunk driver or someone who is texting and driving, that deductible applies. The insurance company for the drunk driver or texting driver keeps the first almost $40,000.00 of your compensation.

The only time the deductible does not apply is in the case of a fatality or if your pain and suffering compensation is awarded at more than $131,854.01. Keeping in mind that the Supreme Court of Canada set a maximum on pain and suffering of $388,177.00, many people with serious, debilitating injuries will not receive compensation of more than $131,854.01. This means that a large number of people will lose this almost $40,000.00 deductible to the insurance company for the at-fault driver.

All of these amounts are increased for inflation every year and it is the year of settlement – not the year of the accident – that determines the amount of the deductible. So, for example, if you were injured in a car accident in 2016, when the deductible was $36,905.40, but your case doesn’t settle until 2020, the deductible would be $39,556.53. That’s an additional $2,651.13 in the pockets of the insurance company for the driver who caused your injury, and the only reason for it is the passage of time to get to settlement.

Shocked and surprised to learn this information? Most people don’t know anything about this deductible until they meet with a lawyer for the first time. It sounds ridiculous to me when I have to tell my clients.

Equally surprising is the fact that if your case goes to trial, the jury won’t be told about the deductible. We cannot even tell them that the at-fault driver is insured.

The system of compensation for injuries from car accidents in Ontario is fundamentally unfair to the injured person. If you have been injured, you need a qualified and experienced personal injury lawyer on your side, to be sure that the compensation you are entitled to is as fair as it can be under the current system.

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