Ontario’s Insurance Act imposes a mandatory deductible against general damages (non-pecuniary damages for pain, suffering, and loss of enjoyment of life) in motor vehicle accident tort claims. Introduced as part of the 1996 reforms, it applies automatically to every general damages award in auto accident cases — courts have no discretion to waive it.
The deductible is indexed annually. For 2025, the applicable threshold is approximately $131,854 and the deductible amount is approximately $41,503.50. Where general damages are assessed below the threshold, the full deductible applies. Where general damages exceed the threshold amount, the deductible disappears entirely and the plaintiff receives the full award.
Settlement valuation implications: Every personal injury settlement must be evaluated net of the applicable deductible. A general damages assessment of $100,000 produces a net recovery of approximately $58,000 after the deductible. Failing to account for the deductible leads to unrealistic settlement expectations.
The statutory deductible applies only to non-pecuniary general damages — compensation for pain, suffering, and loss of enjoyment of life. It does not apply to economic losses: past income loss, future income loss, future care costs, or out-of-pocket medical expenses. In catastrophic injury cases where economic losses predominate, the deductible has proportionally less impact on overall recovery.