2022 Deductible Thresholds Explained

Recently, the Financial Services Regulatory Authority of Ontario (FSRA) published its 2022 Automobile Insurance Indexation Amounts Guidance. This Guidance, effective January 1, 2022, establishes the amounts related to insurance claims that are subject to indexation for 2022. Indexation is tied to the Canadian Consumer Price Index (CPI) and varies year to year.

The FSRA Guidance impacts the statutory threshold and deductible for determining “non-pecuniary” tort awards arising from the use or operation of an automobile. Such awards are usually referred to as “general” damages and are intended to compensate a collision victim for pain and suffering, loss of amenities and loss of enjoyment of life. Damages awards below the threshold amount (for 2022, this amount is $138,343.86) will be subject to a deductible. A similar threshold and deductible are applied to successful claims by family members for loss of care, companionship, and guidance under the Family Law Act (FLA).

The statutory thresholds were created to control the rising cost of personal injury litigation. In practice, they act as a deterrent to many serious personal injury claims and offer a windfall to the insurance companies. Without knowing it, if a jury awards a plaintiff or family member less than the threshold amount for a given year, that award is automatically subject to the applicable deductible amount. This means that a successful claimant could receive ZERO compensation for pain and suffering, or at least be disentitled to a significant portion of their damages on the merits of the case.

General damages that do not meet the threshold will be subject to a $41,503.50 deductible in 2022, up from $39,754.31 in 2021. FLA damages that do not meet the threshold will be subject to a $20,751.76 deductible, up from $19,877 in 2021.

Example 1: The plaintiff suffered a fractured right wrist and soft-tissue injuries to his lower back, right knee and hip. His back pain resolved after several months of physiotherapy. At trial it was determined that the ongoing right knee and hip impairment was from a pre-existing condition, not a collision-related injury. After the fracture healed, the plaintiff continued to suffer from wrist pain with mild deformity and reduced grip and pinch strength.  

At trial in 2020, the jury found that the plaintiff had suffered a permanent and serious injury to his wrist and awarded $35,000.00 for pain and suffering. However, since the award was lower than the threshold for 2020, and the deductible at that time was $39,556.53, the plaintiff received nothing for pain and suffering.

Example 2: The plaintiff suffered from chronic neck and shoulder pain with a “frozen” right shoulder, severe daily headaches, depression and anxiety. Despite ongoing treatment, her condition did not improve, and she could not return to work.

At trial in 2018, the jury accepted that the plaintiff’s chronic pain had impacted every aspect of her life and awarded $140,000.00 for pain and suffering. Because the threshold at that time was $126,610.07, no deductible was applied to her award.

If you have been seriously injured in a car accident and have questions or concerns related to the FSRA Guidance or about your lawsuit generally, we are pleased to offer a free consultation.

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