Section 267.5 of Ontario’s Insurance Act creates a barrier to recovering general damages in motor vehicle accident tort claims. To overcome this barrier, a claimant’s injuries must constitute either a permanent serious disfigurement or a permanent serious impairment of an important physical, mental, or psychological function.
Ontario courts apply a multi-part test drawn from cases including Meyer v. Bright. The analysis asks: Is there an impairment of a physical, mental, or psychological function? Is that function important to this particular person? Is the impairment permanent? Is it serious? Courts assess these questions through the lens of the plaintiff’s individual life — their occupation, activities, relationships, and functioning.
The statutory deductible: Even where general damages are awarded, Ontario law applies a mandatory deductible. For 2025, general damages awards below ~$131,854 are reduced by ~$41,503. The deductible disappears entirely when the award exceeds the threshold amount.
Courts have consistently found the following capable of meeting the threshold: traumatic brain injuries with documented cognitive deficits; spinal cord injuries with functional limitation; significant orthopaedic injuries requiring surgery; chronic pain conditions with demonstrated restrictions; PTSD and major depressive disorder causing substantial life interference; and significant vision or hearing loss.
Soft-tissue injuries that fully resolve; minor whiplash without lasting functional deficit; and short-term psychological distress without a persistent diagnosable condition generally do not satisfy the permanent and serious requirement. These distinctions are fact-specific.
The verbal threshold applies only to non-pecuniary general damages. Claims for past income loss, future income loss, medical expenses, and future care costs do not require crossing the threshold — they are recoverable upon proof of the at-fault driver’s negligence.