FSRA Announces 2025 Statutory Deductibles
In Ontario, individuals injured in motor vehicle accidents (MVAs) seeking compensation for non-pecuniary damages—commonly called "pain and suffering"—must navigate specific statutory deductibles and monetary thresholds outlined in the Insurance Act. These figures are adjusted annually to reflect inflation, directly impacting claimants' net compensation. Effective January 1, 2025, the Financial Services Regulatory Authority of Ontario (FSRA) has implemented updated figures for deductibles and the monetary thresholds.
Updated 2025 Figures
As of January 1, 2025, the FSRA has announced the following amounts:
Non-Pecuniary General Damages (Pain and Suffering):
Monetary Threshold: $155,965.54
Statutory Deductible: $46,790.05
Family Law Act (FLA) Claims for Loss of Guidance, Care, and Companionship:
Monetary Threshold: $77,982.13
Statutory Deductible: $23,395.04
These updates represent modest increases from 2024, consistent with inflation, and continue to shape how compensation is calculated in personal injury claims.
Understanding Deductibles and Thresholds
A statutory deductible is a fixed amount subtracted from the awarded non-pecuniary damages. It applies to claims below the defined monetary threshold, effectively reducing compensation injured claimants. However, if the awarded damages exceed the monetary threshold, the deductible is waived, or as some say, it “vanishes”, and the claimant receives the full awarded amount.
How It Works in Practice
The statutory deductible can significantly impact the net compensation a claimant receives. For example:
Scenario 1: If a claimant is awarded $100,000 for pain and suffering in 2025, the statutory deductible of $46,790.05 would apply, reducing the net award to $53,209.95.
Scenario 2: If the award is $160,000, exceeding the $155,965.54 threshold, no deductible is applied, and the claimant receives the full amount.
For claims brought under the Family Law Act (FLA), the updated deductible for 2025 is $23,395.04, applicable to awards below $77,982.13. As with general damages, FLA claims above this threshold are not subject to a deductible. Fortunately, claims involving fatalities are exempt from the deductible altogether.
It is important to note that the deductibles and monetary thresholds apply to the time when the claim is resolved (settled out of court or through to verdict following a trial). It is NOT tied to the date the injury occurred.
Challenges for Claimants
These deductibles and thresholds can present hurdles for MVA victims seeking fair compensation, particularly when awards fall just below the monetary thresholds. This system disproportionately benefits insurers by limiting their financial exposure.
Another complication arises in trials where juries are unaware of these deductibles. This lack of transparency can lead to awards that, once the deductible is applied, fall short of adequately compensating the claimant. It underscores the importance of proper legal representation to ensure fair outcomes.
#KnowYourRights
Individuals involved in automobile accidents are encouraged to consult with experienced legal professionals to understand the nuances of these regulations and to ensure their claims are presented effectively.
