Many Ontario residents depend on a family member’s Ontario auto insurance to cover them in the event of a car accident. Under Ontario’s Statutory Accident Benefits Schedule, an “insured person” includes any “dependant of the named insured or of his or her spouse.” A dependant does not have to be a minor child, but can be anyone who is “principally dependent for financial support or care” on the insured driver or his or her spouse.
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State Farm Mutual Insurance v. Her Majesty The Queen (Minister of Finance): Insurance Company Fights Province Over Accident Coverage
Determining who is and is not a dependant for insurance purposes can be tricky. Consider this recent decision by the Ontario Superior Court of Justice: In this case, two women were seriously injured in a van accident while traveling to Niagara Falls. At the time of the accident they lived with relatives. The questions presented were: Were they dependants of their relatives? If so, which relatives?
The first victim–we will refer to her as “the Mother”–has five adult children, including a Son and Daughter. The Mother’s sister-in-law–whom we will call “the Aunt”–is married to the Mother’s brother.
Between September and December 2010, the Mother and Aunt both lived with the Daughter and her family. The Daughter then separated from her husband, forcing the Mother and Aunt to move in with the Son. Several weeks later, in February 2011, the Niagara Falls accident occurred. At the time, the Mother and Aunt were still living in the Son’s house.
Son’s Ontario Auto Insurance or MVACF: Who Pays?
The van, driven by the Daughter’s estranged husband, was not insured. Neither the Mother nor the Aunt had Ontario auto insurance of her own, since neither had ever had driver’s licenses nor owned motor vehicles in Canada. This left only two potential sources of benefits to cover their serious injuries arising from the car accident: the Son’s auto insurance policy or the Ontario Motor Vehicle Accidents Claims Fund (MVACF), which is run by the Ontario Ministry of Finance.
The Mother and Aunt sought benefits under the Son’s policy, alleging they were his dependants as defined by Ontario law. The insurance company paid the statutory benefits, but it then sought reimbursement from the Minister of Finance, contesting the victims’ status as the insured Son’s dependants.
The matter was initially submitted to arbitration. The arbitrator ultimately ruled that neither woman was a dependant of the Son. Therefore, the MVACF was liable for their statutory accident benefits.
Superior Court on Appeal: Why Not Both?
The Minister of Finance appealed the arbitrator’s determination to the Superior Court. On July 6, 2018, Justice Andrew A. Sanfilippo, issued a decision partially in favour of the Minister. More precisely, he held that the Aunt was an insured dependant of the Son, but the Mother was not.
As discussed above, Ontario law defines a dependant as someone who is “principally dependent for financial support or care” on the insured person.
The arbitrator determined the Mother and Aunt failed to meet either criteria–that is, they were neither dependent on the Son for “financial support” or “care.” The Minister did not appeal the latter determination regarding care. Therefore, the main question before Justice Sanfilippo was whether or not either woman was “financially dependent” on the Son.
The judge explained that in cases like this one, the arbitrator must follow a two-step process: First, the arbitrator must assess a claimant’s “financial and other needs to determine whether they are self-supporting or whether they are financially dependent.” Second, if they are dependent, the arbitrator must decide whether or not there existed a “principal dependency relationship” with the insured person “at the time of the accident.”
A key point of contention here was the relevant “period of time” necessary to establish the Son’s financial relationship with the plaintiffs. The Superior Court held that the arbitrator used “too long” a period. In particular, this had a significant impact on the analysis of the Aunt’s status.
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The Proper Period for “Principal Dependency”
Basically, the arbitrator looked at the Aunt’s dependency status over the six-month period preceding the accident. She lived with the Son half of that time, and the other half with the Daughter. Based on this, the arbitrator held the Aunt was not “principally dependent” on the Son.
The Superior Court held this was a mistake. The arbitrator should have looked at a shorter, three-month period prior to the accident. During this time frame, it was clear the Aunt lived with the Son exclusively and was financially dependent on him, as she had no income of her own.
The insurance company attempted to argue around this by suggesting the Aunt’s living situation with the Son was not “permanent,” and she could go back to living with the Daughter if she reconciled with her husband. Indeed, the insurer said the whole point of the Niagara Falls trip was to encourage the Daughter to reconcile with her spouse.
The Superior Court saw little relevance in any of this. To the contrary, the judge said, “There is no need to establish a ‘permanence requirement’ in determining principal financial dependency. There is even less reason to speculate concerning the future of the relationship.”
In short, all that matters is the nature of the dependency at the time of the accident. On that day, there was no question the Aunt was financially dependent on the Son. The Daughter had no “support structure” in place to assist the Aunt.
And the Mother? According to the Superior Court, she had a source of income during this time–a monthly benefit of $1,150 from the Ontario Disability Support Program. So even applying the same three-month analysis as applied to the Aunt, the Court held the Mother was not “principally” dependent on her Son on the day of the accident.
Preszler Law Firm can Help You Deal with Your Insurance Company
Insurance disputes account for a high percentage of accident-related litigation in Ontario. Insurance companies are committed to using every legal tool at their disposal to avoid paying a claim. This is why you need to work with an experienced Toronto personal injury lawyer who knows how to deal with insurance companies.
Call the lawyers at Preszler Law Firm today if you have been injured in a car accident and need advice on what steps to take next.