Are you driving around thinking you’re fully covered? You pay those auto insurance bills each month. You trust you’ll be okay if an accident happens. But, a clause in the Insurance Act could drain your compensation. It’s the “secret deductible” in Ontario auto insurance. It could leave you with little or no compensation even when you deserve benefits.
Understanding Ontario’s Two-Tier Insurance System
Ontario has a two-part auto insurance setup. Knowing how it works is key. It affects what you get after a car accident.
No-Fault Benefits: The First Tier
The first part is “no-fault” benefits. This gives some money, no matter who caused the crash. It includes limited income help, maxing out at $400 weekly. You can also get some money for rehab. However, these benefits don’t cover a lot.
Fault-Based System: Suing for Additional Damages
The second part involves suing if someone else was at fault. You can sue for things like lost past and future income. Future care costs, and pain and suffering are included too. But here’s where the “secret deductible” messes things up. This deductible can be costly.
Decoding the “Secret Deductible”
This deductible is applied to pain and suffering awards. It is a hidden part of your insurance. It directly impacts what you may receive.
The $46,000+ Hurdle
The current deductible is just shy of $47,000. This amount goes up each year because of inflation. So, say a court awards you $40,000 for your pain. You actually get nothing because of this deductible.
The “Serious and Permanent Impairment” Threshold
To even get money for pain and suffering, you must prove a few things. You need to show “serious and permanent impairment of an important physical, mental or psychological function.”
Lack of Awareness Among Policyholders
Most folks don’t realize this deductible exists. They don’t know how it can shrink their payout. This lack of knowledge hurts policyholders. They lose money without knowing it.
Jury Restrictions at Trial
During a trial, juries aren’t told about the deductible. Juries can’t factor it in when deciding damages.
Navigating the System: What You Should Do
Here are steps to protect yourself. Make sure you have the right coverage. Knowing what to do helps.
Opt-In Benefits: Maximizing Your Coverage
Soon, there will be an “opt-in” approach for many key no-fault benefits. It’s vital to pick income replacement and other important coverages.
Tip: Check your policy closely. Talk to your insurance broker to learn about your options.
Awareness and Advocacy
If you’re on a jury, keep the deductible in mind. Push for changes to the insurance system.
The Big Picture: Is the System Broken?
The current Ontario auto insurance setup has major inequities when it comes to fairness for accident victims
High Premiums, Limited Benefits
Premiums keep rising. Yet, policyholders get less money because of the deductible. This and other limits are hurting people.
Profit-Driven Insurance Companies
Insurance companies aim to make money. They need to make profits. However, there should be a fairer system. It should balance profits and fair payouts to accident victims.
Conclusion
Ontario’s car insurance can be complex and unfair. The secret deductible allows insurance companies to unfairly limit compensation to accident victims.
