Ontario’s Rising Accident Deductible and Its Impact on Injury Claims

If you are injured in a motor vehicle accident in Ontario, the compensation you receive may be affected by something many people never hear about until it is too late: the statutory accident deductible. This deductible continues to increase each year, and for residents across the Algoma District, including Sault Ste. Marie, it can significantly reduce the value of an injury claim.

Understanding how the accident deductible works, and why it keeps rising, is essential for anyone pursuing injury claims after a collision. Experienced lawyers in Sault Ste. Marie regularly help injured individuals navigate this complex system and protect their right to fair compensation.

Understanding the Accident Deductible in Ontario

The accident deductible applies to nonpecuniary damages. These are damages for pain and suffering and loss of enjoyment of life in a motor vehicle accident lawsuit. Even if an injured person successfully proves the other driver was at fault and meets Ontario’s legal injury threshold, their damages can still be reduced by a mandatory amount set by law.

Under the Ontario Insurance Act, this deductible is indexed annually to inflation and published by the Financial Services Regulatory Authority of Ontario. As inflation rises, so does the deductible, which means injured people are required to absorb a greater financial loss before receiving compensation.

How Much Is the Deductible in 2025 and 2026?

As of January 1, 2025, the statutory deductible for general pain and suffering damages is $46,790.05, provided the award is below the monetary threshold of $155,964.54. For Family Law Act claims, such as compensation for loss of care and companionship, the deductible sits at $23,395.04.

The deductible increased again on January 1, 2026. It now stands at $47,913.01, with the threshold climbing to $159,708.71. Any award below that threshold is reduced by the deductible before the injured person receives payment. 

For Algoma District residents, this means that even a seemingly substantial pain and suffering award can be dramatically reduced.

How the Deductible Impacts Injury Claims

To appreciate the effect of the deductible, consider a common scenario. If an injured person is awarded $80,000 for pain and suffering, the deductible of $47,913.01 would be subtracted. The claimant would actually receive just over $32,000. If the award is lower than the deductible, the injured person could receive nothing at all despite winning their case.

This harsh reality is one of the reasons why injury claims in Ontario are so technically complex and why early legal advice is critical. Insurance companies understand how the deductible works and factor it into settlement offers from the beginning.

The Legal Purpose of Ontario’s Injury Threshold

Before the deductible even applies, injured people must meet Ontario’s verbal threshold. This requires proof of a permanent serious impairment of an important physical, mental, or psychological function. If the threshold is not met, no compensation for pain and suffering is available, regardless of how disruptive the injury may feel to the injured person.

The Ontario Court of Appeal has consistently enforced this framework. In Cadieux v. Cloutier, 2018 ONCA 903, the Court confirmed that statutory deductions under the Insurance Act must be applied strictly, even when it results in substantial reductions to jury awards. The case highlights how legislation, not sympathy, governs injury compensation in motor vehicle cases.

Why the Deductible Keeps Increasing

The provincial government originally introduced the deductible to control insurance premiums and discourage low value lawsuits. By linking it to inflation, lawmakers ensured that the deductible would continue to rise over time without new legislation.

While the policy goal is cost containment, the real-world effect is that injured people shoulder a growing portion of the financial burden after serious accidents. This trend has a particularly strong impact in smaller communities like Sault Ste. Marie, where access to specialized medical care may already be limited.

Navigating Injury Claims with Confidence and Clarity

The accident deductible will likely continue to rise in the coming years. For injured Ontarians, particularly those in the Algoma District, staying informed is one of the most effective ways to protect your rights. Injury claims are never just about proving fault. They are about understanding how Ontario law values human loss and how deductions reduce what you ultimately receive.

When knowledge meets experienced legal guidance, injured people are better positioned to navigate an increasingly complex claims environment. For further insight into how insurance deductibles may affect your claim, connect with Feifel Gualazzi.