Written By: Dale Orlando
Despite the findings of a report from professors Fred Lazar and Eli Prisman indicating that Ontario drivers have overpaid auto insurance premiums to the extent of $840 million in 2013 alone, the Wynne government has forged ahead with changes to the Insurance Act that will deliver significantly higher profits to Ontario’s auto insurers.
Bill 91, Building Ontario Up Act (Budget Measures), 2015, amends sections 267.5(8) and (8.1) of the Insurance Act and introduces subsections (8.3) and (8.4). The effect of these sections is to increase the statutory deductible on claims for non-pecuniary general damages (also known as pain, suffering, loss of enjoyment of life and loss of amenities) and increase the threshold amount at which the deductible vanishes. Before the amendments, the statutory deductible was $30,000.00 and applied to awards for non-pecuniary general damages of $100,000.00 or less.
As of August 1, 2015, the deductible is now $36,540.00 and applies to non-pecuniary damage awards of $121,799.00 or less. The amendments also have the effect of increasing both the deductible and the point at which it vanishes by the rate of inflation going forward.
The impact of these changes is significant when you consider the cap on non-pecuniary general damages. In Canada, the most a person can recover for this head of damages is roughly $350,000.00. This amount increases yearly with the rate of inflation. This means that a teenager that suffers a spinal cord injury and will spend the rest of her life in a wheelchair will receive the $350,000.00 for her pain, suffering, loss of enjoyment of life and loss of amenities.
Given the cap on these damages, you can imagine that a person can have very significant injuries (such as multiple fractures) but not receive a pain and suffering award in excess of $121,799.00. This person will have the first $36,540.00 of their award kept by the insurance company that is responsible for paying damages.
It is truly a sad day for those unfortunate enough to suffer serious injuries in an auto accident in Ontario.