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How Does Uninsured Motorist Coverage Work in Ontario?

Every Ontario driver is required to carry auto insurance. Unfortunately, many drivers ignore this mandate. Or if they do have insurance, it is insufficient to compensate a motor vehicle accident victim for the full amount of his or her injuries. So what does the victim do in such circumstances?

Generally, the victim would turn to his or her own auto insurance policy. The Ontario Insurance Act requires all auto insurance contracts to include uninsured motorist coverage. As the name suggests, an “uninsured” motorist is a driver who lacks sufficient insurance (or the driver in a hit-and-run collision). By carrying uninsured motorist coverage, a driver is effectively insured against the risk of being injured by a driver who fails to follow the law.

If you are injured in an accident and have reason to believe the negligent driver is uninsured or underinsured, you will need to inform your insurance company. Indeed, in such cases the insurance company effectively steps into the shoes of the defendant and becomes a party to the underlying personal injury claim.

Of course, many insurance companies will deny their own responsibility in such cases and may even attempt to prove the negligent drivers actually carried valid insurance at the time of the accident.

  • Ontario auto insurance policies provide coverage in the event a negligent driver is uninsured, underinsured, or unknown (as in a hit-and-run).
  • To avoid paying out on an uninsured motorist claim, an insurance company may try to prove that the negligent driver was, in fact, insured at the time of the accident.
  • Insurance companies’ denials are subject to review by courts.

Harte v. Lavrov: Manitoba Insurer May be on the Hook for Ontario Car Accident

An Ontario Superior Court judge recently considered such a case. This lawsuit began with an auto accident in October 2008. The plaintiff was rear-ended by another vehicle. She subsequently sued the driver and his brother, who owned the vehicle. The brother failed to respond to the lawsuit, but the driver remains a party.

The plaintiff later amended her lawsuit to name her own insurance carrier, Guarantee Company of North America, as an additional defendant. The plaintiff said that based on her information, the driver and his brother “were uninsured or underinsured at the time of the accident.”

Guarantee denied this, however, and insisted the brother carried a valid auto policy issued by Manitoba Public Insurance (MPI). This led Guarantee to bring a third-party claim against MPI–effectively, a demand that Manitoba compensate Guarantee for any losses it sustains in connection with the plaintiff’s personal injury claim.

For its part, MPI argued the brother’s policy “was suspended at the time of the accident” due to non-payment of premiums. Furthermore, the brother was in breach of the policy’s residency requirement. MPI also noted that Ontario has a two-year statute of limitations that Guarantee failed to meet in filing its third-party claim.

Guarantee eventually reached a financial settlement with the plaintiff. As part of this agreement, the plaintiff “assigned” her rights in the accident lawsuit to Guarantee. This allowed Guarantee to turn around and seek damages from MPI.

Questions for the Court

All of the parties asked Justice Richard A. Lococo to answer three basic questions: First, was the brother insured by MPI at the time of the accident? Second, if so, was MPI required to “defend and indemnify” the brothers for causing the accident? And third, was Guarantee’s third-party claim against MPI barred by Ontario’s statute of limitations?

Justice Lococo answered the first two questions “yes,” and reserved final judgment on the third question.

Insurance Not Validly Revoked for Non-Payment

As noted above, MPI said there were two reasons the brother’s insurance policy was no longer in force when the accident occurred: He failed to pay his premium and he had moved to Ontario without registering his vehicle with the province. This automatically “revoked” the policy under Manitoba law, which requires a valid owner’s certificate as a condition of insurance.

Guarantee replied that MPI actually failed to follow Manitoba law when it revoked the brother’s insurance for non-payment. Furthermore, as an “out-of-province” insurer (from Ontario’s perspective), MPI was required to cover its insured vehicles when operating in Ontario. It therefore could not cite the brother’s failure to register as grounds for denying coverage.

Justice Lococo concluded that while MPI was “entitled” to revoke the brother’s policy for non-payment under Manitoba law, it was required to provide written notice of the suspension “without delay.” Here, MPI said the suspension took effect on October 4, 2008, but it did not provide the written notice prior to October 17, 2008, which was the day of the accident.

Therefore, the Court held that MPI could not rely on the brother’s non-payment to deny coverage for the accident.

MPI Can’t Deny Coverage Just Because the Defendant Failed to Register in Ontario

Similarly, Justice Lococo agreed with Guarantee that the brother’s failure to register his vehicle after moving from Manitoba to Ontario did not constitute grounds to deny coverage. There was no dispute that the brother did not register his vehicle, which is required by Ontario law. There was also no question that a failure to register is valid grounds for revoking an insurance policy under Manitoba law.

The problem here, the judge noted, is that there is “no equivalent Ontario provision that automatically denies insurance coverage with respect to an Ontario vehicle being operated in a jurisdiction outside Ontario if the vehicle is not properly registered in that jurisdiction.”

The main reason for this difference is that Manitoba has a public auto insurance system, while Ontario does not. In any case, the judge explained, it would be inconsistent to permit MPI the right to deny coverage under a legal “defence” that would not be permitted if the shoe were on the other foot–i.e., if an Ontario insurance company attempted to deny coverage in a similar Manitoba accident.

To sum up, the owner of the vehicle that caused the plaintiff’s accident was insured by MPI, and MPI is therefore required to “defend and indemnify” the brothers for any damages arising from the accident.

Learn more: Injury Claims Without Insurance in Ontario: Can it be Done?

Get Help Dealing with Uninsured Motorist Claims From an Ontario Car Accident Lawyer

As you can see, auto insurance is complicated, especially when multiple insurers are involved (none of which accept liability). That is why it is so critical to contact an Ontario personal injury lawyer as soon as possible after a car accident.

The last thing you want to do while recovering from your injuries is try and sort out insurance coverage. At Preszler Injury Lawyers, we can take that burden off your hands. Call us today to schedule a free, no-obligation consultation.


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