Here’s how SABS and tort interact under Ontario’s accident benefits, and what a LAT ruling means
Most people involved in a car accident in Ontario assume they face a single insurance claim. In reality, the system runs on two separate tracks; first is Ontario’s accident benefits, and the other is a civil lawsuit against whoever caused the crash.
What do accident benefits in Ontario cover?
Ontario’s accident benefits system is a no-fault arrangement, where an insurer pays out regardless of who caused the collision, and payments begin right away. The legal framework comes from the Statutory Accident Benefits Schedule (SABS), made under the provincial Insurance Act.
Under this framework, anyone involved in a motor vehicle accident in the province, whether a driver, passenger, or pedestrian, is eligible for accident benefits in Ontario. This means that fault has no bearing on one’s eligibility for such benefits.
What standard accident benefits Ontario coverage includes
Under the SABS, the amount of coverage depends on how the injury is classified:
- minor injuries without complications: medical and rehabilitation benefits capped at $3,500 under the Minor Injury Guideline
- non-catastrophic impairment: combined medical, rehabilitation, and attendant care of up to $65,000 over five years
- catastrophic impairment: medical, rehabilitation, and attendant care of up to $1,000,000
Learn more about the accident benefits in Ontario with this video:
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What changed with accident benefits Ontario in 2026
Effective July 1, 2026, Ontario Regulation 383/24 amended the SABS, wherein only three benefits are now mandatory in every auto insurance policy:
- medical benefits
- rehabilitation benefits
- attendant care benefits
The other benefits are now optional coverage, such as income replacement benefits, non-earner benefits, caregiver benefits, housekeeping support, and death and funeral benefits. Whether an insured has them now depends entirely on the specific policy.
Can you claim accident benefits and sue at the same time?
Yes, as held in Cadieux v. Cloutier, 2018 ONCA 903, that accident benefits and tort damages “are independent of one another.” Both claims can run at the same time, and for seriously injured claimants, that is usually the right approach.
What the tort claim covers that accident benefits do not
The coverage of accident benefits in Ontario provides immediate financial support. On the other hand, a tort claim against the at-fault driver’s insurer addresses what the SABS was not designed to fully cover, such as:
- damages for pain and suffering and loss of enjoyment of life
- future income loss above the income replacement benefit ceiling
- future cost of care
- Family Law Act claims, which allow family members to seek compensation for the loss of a loved one’s care, guidance, and companionship
The threshold and the deductible
Suing for pain and suffering requires the injury to have caused a permanent, serious impairment of an important physical, mental, or psychological function, as set out in s. 267.5 of the Insurance Act. Even then, a statutory deductible applies to general damages.
For 2026, that deductible sits at approximately $47,913, indexed annually at a 2.4 percent rate by the Financial Services Regulatory Authority of Ontario (FSRA). If the jury’s general damages award exceeds approximately $159,709, the deductible is waived entirely.
How are accident benefits deducted from a tort award?
Section 267.8 of the Insurance Act prevents double recovery. As such, accident benefits received before trial must be deducted from the corresponding heads of tort damages. The question of exactly how that deduction is calculated took Ontario courts decades to resolve.
From strict matching to the silo approach
Under the old “apples to apples” or strict matching method from Bannon v. McNeely, 1998 CanLII 4486 (ON CA), a specific benefit had to be matched against an identical head of tort damages before any deduction was made. A five-judge panel of the Ontario Court of Appeal ended that approach in Cadieux, replacing it with the silo method.
Under the silo approach, benefits fall into three broad statutory categories. Deductions are made within those categories only:
- Silo 1: income replacement, non-earner benefits, and caregiver benefits are deducted from tort awards for income loss and loss of earning capacity, under s. 267.8(1)
- Silo 2: medical, rehabilitation, and attendant care benefits are deducted from health care damages, under s. 267.8(4)
- Silo 3: housekeeping, visitor expenses, and lost educational benefits are deducted from other pecuniary loss damages, under s. 267.8(6)
However, no cross-silo deduction is permitted.
Non-earner benefits Ontario belong in Silo 1
In Kolapully v. Myles, 2024 ONCA 350, the court held that non-earner benefits belong in Silo 1. In this case, Shoba Kolapully had received approximately $95,000 in non-earner benefits. Therefore, that amount was deductible from her $200,000 tort award for past income loss, reducing her net recovery on that head to approximately $105,000.
Other deduction mechanics
- deductions are made after contributory negligence is apportioned under s. 3 of the Negligence Act, per s. 267.8(8) of the Insurance Act
- in multi-defendant cases, each defendant receives only its proportionate share of the deduction, not the full SABS amount, as stated in Cadieux
- deductions are made on a gross basis, not net of the plaintiff’s legal fees for pursuing the SABS claim, per Cadieux
- the Settlement Disclosure Notice (SDN), which allocates a SABS settlement among the three silos, directly shapes what will later be deducted from the tort award
Here’s more about the changes with the SABS effective July 1, 2026:
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How does a LAT decision affect a tort claim?
The Licence Appeal Tribunal (LAT), through its Automobile Accident Benefits Service (AABS), has been the exclusive forum for Ontario accident benefits disputes under s. 280 of the Insurance Act.
Catastrophic impairment and tort file valuation
When the LAT determines that a claimant qualifies as catastrophically impaired, the benefit limits under s. 18(3) of the SABS automatically rise from $65,000 to $1,000,000 for combined medical, rehabilitation, and attendant care. The LAT adjudicates the classification; the regulation does the rest.
The 104-week income replacement test
After 104 weeks, the income replacement benefit test shifts. A claimant must then show they cannot perform any occupation suited to their education, training, or experience. Insurers routinely cut off the benefit at this mark.
A favourable LAT ruling on this “any occupation” test carries real weight in the tort proceeding. If the SABS insurer could not establish that a claimant is able to return to work at the LAT, the tort insurer faces the same evidence when income loss is quantified in court.
LAT costs recoverable in the tort action
In Kolapully, the Court of Appeal upheld an award of $64,359.15 in LAT legal costs as part of the tort costs order. The court applied the principle drawn from Cadieux, where legal fees and disbursements in pursuing SABS can be treated as costs incidental to the tort proceeding where those benefits reduced the damages payable by the tortfeasor. The award is not automatic and remains fact specific.
What the LAT cannot do
One of the things that the LAT cannot do is to award punitive damages, as confirmed in Keulen v. Allstate Insurance Co., 2024 ONSC 2033. Its jurisdiction is defined strictly by the Licence Appeal Tribunal Act, and does not extend to remedies available only in civil court.
The two-year window
Under s. 56 of the SABS, a claimant generally has two years from the date of the insurer’s denial to file a dispute at the LAT, and each denied benefit carries its own two-year limit. Missing that deadline can end a valid claim regardless of its merits.
Accident benefits Ontario: two tracks, one destination
Ontario’s compensation system puts two claims in motion the moment a crash happens. While the tort file develops, the accident benefits in Ontario keep a client financially supported. Getting both tracks right is what separates a well-built personal injury file from one that arrives at the finish line short.
Bookmark Canadian Lawyer’s Personal Injury page for more news, articles, and updates about Ontario’s accident benefits regime.
