Statutory Deductibles and Monetary Thresholds for Motor Vehicle Accident Claims

In December 2024, the Financial Services Regulatory Authority of Ontario (“FSRA”) published the 2025 monetary thresholds and deductibles for non-pecuniary general damages under the Insurance Act and O. Reg. 461/96: Court Proceedings for Automobile Accidents that Occur on or After November 1, 1996.¹ The updated monetary thresholds and deductibles are applicable to damages for non-pecuniary loss from January 1, 2025 to December 31, 2025.

As of January 1, 2025, the deductible for damages for non-pecuniary loss in motor vehicle accident-related personal injury claims (“deductible”) is $46,790.05, representing a slight increase over the 2024 deductible amount of $46,053.20. The deductible for damages for non-pecuniary loss in Family Law Act claims has also increased slightly from $23,026.61 to $23,395.04.²

The monetary thresholds beyond which the statutory deductibles for non-pecuniary general damages do not apply (“vanishing deductible”) have also increased for 2025. For personal injury claims, the monetary threshold for 2025 is $155,965.54, an increase from $153,509.39 in 2024. In Family Law Act claims, the monetary threshold has increased from $76,754.06 to $77,982.13.³ It is important to remember that the statutory deductible also does not apply when a claim involves a fatality, and damages are advanced under the Family Law Act for loss of guidance, care, and companionship.

In a trilogy of cases in 1978, the Supreme Court of Canada established a cap for non-pecuniary general damages for pain and suffering in the amount of $100,000. The cap was established to limit the amount of compensation that could be awarded for pain and suffering. The cap is not a static amount and is adjusted for inflation. According to McKellar Structured Settlements, as of November 2024, the cap was $460,969.00.⁴

In addition to updates to the monetary thresholds and deductibles, the FSRA published a new indexation percentage for 2025: 1.6%.⁵ This indexation percentage is used to update monetary amounts and deductibles to account for inflation. It impacts the monetary thresholds and deductibles for determining non-pecuniary tort awards under the Insurance Act, R.S.O. 1990, c. I.8, and O. Reg. 461/96: Court Proceedings for Automobile Accidents that Occur on or After November 1, 1996.⁶

Summary Of Deductible and Monetary Threshold Amounts: 2024-2025 Comparison

Discount Rates and Tax Gross-Up Rates

In September 2024, the Province of Ontario published the discount rates and the tax gross-up rates for trials commencing on or after January 1, 2025. The discount rate represents the difference between price inflation rates and the interest rate at which money for future pecuniary losses can be invested. Under rule 53.09(1) of the Rules of Civil Procedure, the published discount rate must be used in determining the amount of an award for future pecuniary damages.⁷ The discount rate for the 15-year period following the start of trial has risen from 1.0% in 2024 to 1.1% in 2025.⁸ The modest increase in the discount rate for the 15-year period following the start of trial will serve to decrease the cost of future pecuniary damage awards. Rule 53.09(1)(b) prescribes that the discount rate for any period beyond 15 years is 2.5% per year.⁹

The tax gross-up rate is an additional amount included in an award for future pecuniary damages to account for the income taxes one will owe on the award. For 2025, the gross-up rate has increased from 2.2% in 2024 to 2.3% for the 15-year period following the start of trial. For the period beyond 15 years, the gross-up rate has risen from 0.7% in 2024 to 0.9% in 2025.¹⁰ Due to rules about the non-taxation of structured settlements, and provisions of the Insurance Act and Courts of Justice Act requiring the use of structured settlements in several situations, the tax gross-up will be inapplicable to many future pecuniary damage awards in personal injury cases.

Maximum Canada Pension Plan Disability Pensions

As of 2025, the maximum Canada Pension Plan (“CPP”) disability benefit is $1,673.24 per month or $20,078.88 annually.¹¹ The minimum CPP disability benefit is currently $598.49 per month or $7,181.88 annually.¹²

1. Insurance Act, RSO 1990, c I.8; O. Reg. 461/96: Court Proceedings for Automobile Accidents that Occur on or After November 1, 1996.
2. Financial Services Regulator Authority of Ontario, “2025 Automobile Insurance Indexation Amounts Guidance”.
3. Ibid.
4. McKellar Structured Settlements, “Non-Pecuniary Damages Upper Limits".
5. Financial Services Regulatory Authority of Ontario, supra note 2.
6. Ibid.
7. Rules of Civil Procedure, RRO 1990, Reg 194, r. 53.09(1) [RCP].
8. Government of Ontario, “Future pecuniary damage awards” (last modified 27 September 2024).
9. RCP, supra note 6, r. 53.09(1)(b).
10. Government of Ontario, supra note 7.
11. McKellar Structured Settlements, supra note 4.
12. Ibid.