Indexation Benefit

Inflation has been on the rise across Ontario, and it can make everyday expenses much more costly. While inflation often affects the price of groceries, gas, and medical care, it can also present challenges when it comes to Statutory Accident Benefits. Without making adjustments for inflation, the real value of benefits decreases over time.

In Ontario, the Statutory Accident Benefits Schedule (SABS) includes an optional indexation benefit that helps you ensure your benefits keep pace with inflation. The indexation endorsement increases certain benefit amounts each year based on the Canadian Consumer Price Index (CPI), so injured accident victims don’t lose their purchasing power as inflation increases.

At Preszler Injury Lawyers, we help clients who have been injured in motor vehicle accidents understand and claim optional Accident Benefits like indexation. Whether you have questions about your eligibility or your insurer has denied your application, we can help. Contact us today for a free consultation.

What is the Indexation Benefit and How Does it Work?

In Ontario, the SABS requires all drivers to hold basic, no-fault insurance coverage for their vehicles. Through this insurance, any individuals injured in motor vehicle accidents can access certain Accident Benefits, regardless of who was at fault for the collision.

One such benefit available through the SABS is the indexation benefit. This is an optional coverage add-on to Ontario auto insurance polices and is not automatically available through basic plans. It increases the amount of certain SABS benefits you’re receiving each year in line with Canada’s CPI.

Every year, adjustments to benefits occur:

• Annually, on January 1, following the accident
• Increases apply to both ongoing payments and benefit limits
• The percentage of adjustment may vary from year to year (e.g., in 2022 it was a 4.4% increase).

Not all Accident Benefits are adjusted according to the indexation endorsement. The only kinds affected include:

• Income Replacement Benefits
• Non-Earner Benefits
• Attendant Care Benefits
• Medical and Rehabilitation Benefits

Why Should You Consider Purchasing the Optional Indexation Benefit?

The indexation endorsement can be incredibly helpful for ensuring that the value of the benefits you are receiving retain their real-world value. Although the optional add-on will add a modest cost to your insurance premium, you can feel assured that you won’t be undercompensated as costs rise.

For example, if you receive income replacement benefits for years at a time without indexation, they will not cover as many of your expenses as inflation increases. $400/week in 2016 is not worth the same in 2025, because inflation has eroded purchasing power.

The indexation benefit may be best suited for individuals who are concerned about long-term disability or catastrophic impairment but it should concern everyone. This is because those who need ongoing income replacement, attendant care, and medical treatment for years at a time will be affected by inflation.

How Does Indexation Affect Accident Benefits?

To determine the value of the indexation benefit for your situation, it can be helpful to think about real-world scenarios.

Suppose a claimant receives $400 per week in income replacement benefits. With a 4.4% indexation adjustment, their weekly payments will increase to $417.60 the following year. If they continue to collect income replacement over several years, this adjustment will prevent a significant loss of value due to inflation.

In addition, for benefits with coverage caps, the indexation endorsement will ensure that limits rise annually. For example, the $65,000 non-catastrophic coverage cap for medical and rehabilitation expenses will increase each year according to the CPI until they have been exhausted. This can help cover future treatment costs as healthcare expenses increase.

Applying for the Indexation Benefit? Contact Preszler Injury Lawyers Today

Unfortunately, insurers often fail to apply the indexation benefit correctly or try to dispute claimants’ eligibility. You may feel confused about whether you purchased indexation and how it applies to your benefits. Families may not even realize that they have this form of coverage until after their accident occurs.

At Preszler Injury Lawyers, we ensure that clients injured in motor vehicle accidents have access to the full extent of Accident Benefits they are entitled to. With professional support, you can feel confident that you are not underpaid due to insurer mistakes.

Our lawyers will:

• Review your policy to confirm whether optional indexation was purchased.
• Ensure that your insurance provider calculates and applies the annual inflation increase correctly.
• Advocate for your full access to indexed benefits in long-term claims.
• Explore your eligibility for other optional benefits alongside indexation.
• And more.

If you’re navigating a Statutory Accident Benefits claim involving indexed accident benefits, Preszler Injury Lawyers can help. Call 1-888-608-2111 to schedule a free consultation today.