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2023 Threshold and Deductible Amounts Released

Recently, the Financial Services Regulatory Authority of Ontario (FSRA) published its 2023 Automobile Insurance Indexation Amounts Guidance. This Guidance, effective January 1, 2023, establishes the amounts related to insurance claims that are subject to indexation for 2023. 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. 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 that 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.

For 2023, the CPI is 6.9%. As a result, the threshold will increase to $147,889.59 from $138,343.86 in 2022, and to $73,944.18 from $69,171.36 for FLA claims.

General damages that do not meet the threshold will be subject to a $44,367.24 deductible in 2023, up from $41,503.50 in 2022. FLA damages that do not meet the threshold will be subject to a $22,183.63 deductible, up from $20,751.76 in 2022.

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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