Legal Blog
Motor Vehicle Accident Deductible
Monday, June 09, 2008
The Motor Vehicle Accident Deductible: What You Should Know
When someone is injured in a motor vehicle accident in Ontario, they may seek to recover money called 'damages' from one of the insurers of the people involved. Seeking damages requires a person to have a permanent serious impairment of their physical or mental state as a result of the accident or alternatively, to have a permanent serious disfigurement (such as burns or scarring) as a result of the accident.
Damages can be many things, from medical expenses and future loss of income, to losses that are more difficult to put into numbers, such as pain and suffering. Any award of damages or settlement is necessarily tax-free, in order to ensure that the victim is fully compensated for his or her loss. However, there is one main exception to this rule. This exception relates to 'non-monetary general damages' which are under $100,000.
General damages are those which cannot easily be made into a number, for example by a doctor's bill or the purchase of a homecare device. Non-monetary damages means that the award is not meant to directly compensate for lost money, but rather for damages such as pain and suffering, emotional trauma and the general impact an accident can have on a person's life.
Awards for non-monetary general damages which are under $100,000 have a government-imposed deductible of $30,000. For example, if you were awarded $99,999 in non-monetary general damages, you would only receive $69,999, and if you were awarded $30,000, you would receive nothing. This is obviously problematic for a system which is based on giving people what they deserve. How can taking $30,000 of deserved money away be justified?
The provincial government states that this deductible, which was originally placed at $15,000, is necessary to avoid frivolous motor vehicle accident lawsuits. What the deductible really does is target the less fortunate members of society involved in motor vehicle accidents, those who need the money the most, and frustrate the true purpose of the legal system, compensating people who have suffered harm.
Recently, reviews of the current auto insurance system in Ontario have been undertaken and chances are good that changes will soon be made, either through the Legislature or the Courts. However, at the current time, the $30,000 deductible is the law.
At Neinstein and Associates, we are commited to ensuring that all of our clients receive the maximum compensation that they are entitled to and we work hard to protect our clients from the possible effects of the $30,000 non-payment. The deductible is another issue which one must be aware of when dealing with motor vehicle accident litigation.