Uninsured driver loses novel claim about why he’s still ‘insured’ under accident benefits law

An injured driver has lost his court bid to collect accident benefits after arguing that he was an ‘insured’ driver — despite his lapsed auto insurance policy with his insurer — because Ontario’s insurer of last resort, the Motor Accident Vehicle Claims Fund (MAVC), would cover him anyway.

Ontario’s Superior Court found taking this argument to its logical conclusion would mean all auto insurers in the province would owe accident benefits to uninsured drivers, regardless of whether they had a policy with them or not.

“The consequences of adopting the [claimant’s] expansive interpretation of the SABS [Statutory Accident Benefits Schedule] would be that every motor vehicle involved in an accident in Ontario would be an ‘insured automobile’ and every occupant in such a vehicle would become an ‘insured person,’ and entitled to the SABS benefits from any insurer in Ontario,” Ontario Superior Court Justice Andrew Pinto wrote in an Oct. 9 decision.

“In this scenario, the person could seek benefits from any insurance provider in Ontario who would be obliged at first instance to provide accident benefits, subject only to subsequent adjustment in a priority dispute with another insurer or the [MACV] Fund.”

Mir Wais’ auto insurance policy with Coachman Insurance Company lapsed on June 10, 2021. He was uninsured when he was involved in a collision on Aug. 20, 2021. (The court noted his “insurance broker failed to properly put in place a policy with Nordique Insurance prior to the accident.”)

Wais applied to Coachman for accident benefits on Sept. 30. The insurer denied the application, citing his lapsed policy.

Also in the news: How Ontario’s plan to scrap speed cameras could raise insurance premiums

Before the Ontario Licence Appeals Tribunal (LAT), Wais made the novel argument that because the MAVC would insure him as the insurer of last resort, the matter was simply a priority dispute between insurers. In other words, Coachman would have to pay him accident benefits while the dispute between insurers was resolved.

The LAT rejected that argument, as did the Ontario Superior Court.

Most recently, the court noted the SABS definition of ‘insured person’ refers to “a particular motor vehicle liability policy.”

That means “the specific policy insuring the person or the vehicle, and not just any theoretical, potential, or generic motor vehicle liability policy,” Pinto wrote.

“I agree with the tribunal’s reasoning that [Wais] has not provided any authority for the argument that a ‘particular’ policy means any indeterminate policy or is a reference to a ‘group’ of insureds that automatically get coverage from the [MAVC] Fund.”

Why innovative customer experience will define the future of personal auto insurance Image

Insights Paid Content

Why innovative customer experience will define the future of personal auto insurance

Technology is helping insurers reimagine how they support personal auto customers — and it starts the moment a collision is reported, say experts at Accident Support Services International.

By 

Sponsor Image

The court went on to add “recourse to the Fund…is not automatic.”

The Insurance Act states access to the fund requires an insured first to exhaust recourse against all other insurers. “It therefore cannot be said that the Fund would have insured [Wais],” the Superior Court concluded, and therefore “[Wais’] argument based on the Fund as [his] insurer fails.”

David Gambrill

David has twice served as Canadian Underwriter’s senior editor, both from 2005 to 2012, and again from 2017 to the present.