Inflation.
We’ve heard that word a lot over the past two years. We’ve also felt the impact of inflation at the grocery store, at the gas pump, and on our variable-rate loans.
Motor Vehicle Accident victims are also impacted by inflation, since the monetary thresholds and deductibles are indexed to inflation, they increase every year. If inflation is high, the increase is high.
As of 2023, the monetary threshold is $147,889.59, and the deductible is $44,367.24.[1] This means that if an accident victim is awarded less than $147,889.59 in general damages, their claim is subject to a $44,367.24 deductible (e.g., if they were awarded $144,367.24, they would only receive $100,000.00).
Every year, the Financial Services and Regulatory Authority (“FSRA”) publishes an indexation percentage and the new thresholds and deductibles every year. In 2023, the indexation percentage was a whopping 6.9%.
In theory, general damages awards are supposed to increase with inflation too, but unlike the monetary threshold and deductible, there is no indexation percentage published every year. Ultimately, a Judge or Jury will decide the amount of general damages to award based on the facts of the case. While inflation informs their decision, there is no formula to calculate a general damages award, let alone determine how much inflation ought to influence one.
Worse yet for accident victims is that inflation doesn’t apply to the accident benefits they receive from their own insurer, unless they have purchased the optional indexation benefit.
Most of the accident benefits’ maximums have stayed the same or decreased since the modern-day accident benefit scheme took effect on November 1, 1996. Without optional benefits, the following maximums apply to Statutory Accident Benefits[2]:
| Benefit | Maximum Amount | Last time increased[3] |
| Income replacement | $400/week | Same since 1996 |
| Non-earner benefit | $185/week | Same since 1996 |
| Death benefit | $25,000 – spouse
$10,000 – dependant $6,000 – funeral |
Same since 1996 |
| Housekeeping | $100/week (catastrophic injuries only) | Same since 1996
Benefit used to apply to non-catastrophic injuries as well, but no longer does |
| Maximum medical, rehabilitation, and attendant care benefits (non catastrophic injuries) | $65,000 (over five years) | DOWN from $100,000 over 10 years for accidents before September 1, 2010, but increased from $50,000 over 10 years to $65,000 over 5 years on June 1, 2016 |
| Maximum medical, rehabilitation, and attendant care benefits (catastrophic injuries) | $1,000,000 (lifetime) | Same since 1996 |
If you are the victim of a car accident that’s not your fault, you might be able to recover some of the “difference” between what your own insurer pays and the amount you actually need to compensate you for your losses and pay for treatment. However, that could take years.
Meanwhile, the value of any income loss claim is decreasing, since the at-fault driver’s insurance company only has to compensate you for 70% of your pre-trial income loss.[4] And, you’re not getting the treatment you need because you simply can’t afford it.
The bottom line for accident victims is this: the cost of everything is going up, but the compensation available to accident victims and their families doesn’t always keep pace.
If you’ve been injured in a car accident and would like to consult us, please contact our office.
[1] Family Law Act claims have different thresholds and deductibles
[2] Maximums retrieved from FSRA: https://www.fsrao.ca/consumers/auto-insurance/purchasing-your-policy/increasing-your-liability-and-accident-benefits-coverage
[3] O Reg 403/96 as made on August 14, 1996
[4] Insurance Act, s 267.5(1)
ROBERT MURPHY
Rob attended law school at Queen’s University and graduated with his Juris Doctor in 2020. He summered at and completed his articles with Weaver, Simmons LLP, a full-service firm in Northern Ontario. During his articles Rob had the opportunity to see personal injury files from both the plaintiff side and the defence side. After articles, Rob practiced injury law and general litigation with Kelly + Kelly Lawyers in Pembroke, until Kelly + Kelly’s civil litigation practice joined Bergeron Clifford in 2023.
