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Understanding Deductibles and the “Threshold” in Personal Injury Claims

When we often hear the word “deductible”, it’s associated with some sort of property damage claim. For example, many of us have an automobile policy that has a particular deductible in the event that we wish to make a claim for damage to the vehicle. This deductible is, essentially, “to be paid” by the claimant for the damage of the vehicle. The remaining amount is then compensated for by the insurer of the vehicle. For personal injury claims throughout Toronto and the Greater Toronto Area, you’ll often hear lawyers discussing deductibles and “threshold” — but they’re not referring to the property damage of the vehicle. Instead, they’re referring to the injuries sustained by the claimant.

When you’re involved in a car accident, one of the “heads of damages” that your lawyer will seek is for the pain and suffering that you have experienced as a result of the accident. This includes both physical and mental injuries you may have sustained, and often takes into account the limitations that have come by way of those injuries. However, not every injured claimant will have access to funds for pain and suffering. On the contrary, for one to have access to a pain and suffering award, they must have sustained an injury which meets the “threshold.” The threshold typically requires a person to have suffered an injury that results in both a serious and permanent impairment. Almost on a monthly basis, the courts throughout Ontario are asked to assess claims to determine whether the claimants injuries meet the threshold. If the injuries are found to in fact meet the threshold, then the parties must take into account the quantification of damages — that is, how much is the pain and suffering worth?

This is where the “deductible” touched on above comes into play.

Currently in Ontario, there is a $30,000 deductible for pain and suffering claims that are assessed at under $100,000. For example, if the pain and suffering you’ve experienced as a result of a car accident in Toronto is valued to be $90,000, the parties must then subtract $30,000 (the deductible), leaving $60,000 for the claimant. However, if the pain and suffering you’ve experienced is valued at $105,000, then the $30,000 deductible will not apply, and you will have access to the full $105,000 (since it is above $100,000).

Valuing the injuries someone sustained in a motor vehicle accident takes skill  and experience in the area of personal injury law. As you can see by the examples above, how a case is presented and valued will play a critical role in the amount of compensation available. Contact your personal injury lawyers at Tafakori Khan LLP for a free valuation of your claim.

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