In a recent Ontario Court of Appeal insurance decision, a jurisdictional issue was raised with regard to a claimant who was injured in Nunavut but was otherwise covered by an Ontario policy.
Insurers Dispute Coverage of Statutory Accident Benefits
The claimant was catastrophically injured in an accident in Nunavut, where she was temporarily employed as a nurse supervisor. She was driving a Nunavut-plated vehicle owned by the Government of Nunavut and covered by a Nunavut motor vehicle insurance policy issued by Travelers Insurance Company of Canada (“Travelers”) to the Government of Nunavut. Under that policy the claimant was entitled to Nunavut statutory accident benefits.
The claimant was ordinarily resident in Ontario. She owned a car plated in Ontario and insured by CAA Insurance Company under the terms of the Ontario Standard Automobile Policy (“OAP”), which included coverage for prescribed statutory accident benefits. Ontario statutory accident benefits are more generous than those of Nunavut.
Under the terms of her Ontario insurance policy, the claimant was contractually entitled to claim Ontario statutory accident benefits from CAA. The OAP covers an insured wherever he or she drives in North America. Section 1.2 of the prescribed policy form provided:
This policy covers you and other insured persons for incidents occurring in Canada, the United States of America and any other jurisdiction designated in the Statutory Accident Benefits Schedule, and on a vessel travelling between ports of those countries. All of the dollar limits described in this policy are in Canadian funds.
The CAA coverage followed the claimant to Nunavut. This was the basis on which the claimant was entitled to seek statutory accident benefits under the CAA policy, even though the accident that led to her injuries occurred in Nunavut and did not involve her Ontario-insured car. CAA has been paying those benefits.
CAA pursued Travelers for reimbursement for some or all of the benefits CAA paid to the claimant under Ontario’s legislated motor vehicle insurance regime as a form of a “statutory cause of action”.
CAA succeeded in its claim against Travelers in an arbitration under s. 268 of the Ontario Insurance Act. The arbitrator required Travelers to reimburse CAA for the benefits CAA had paid to the claimant and to assume responsibility for paying the benefits to her in the future. The appeal judge upheld the arbitrator’s decision, accepting the arbitrator’s analysis.
Travelers appealed the decision.
The issue on appeal was whether CAA was entitled under the Ontario Insurance Act to recover from Travelers some or all of the statutory accident benefits that CAA has paid to the claimant and to compel Travelers to pay these benefits to her in the future.
Travelers was willing to pay what it was obliged to pay as statutory accident benefits under the Nunavut policy (for which it received premiums at the Nunavut level), but not the higher Ontario statutory accident benefits. Travelers argued that the statutory scheme did not oblige it to pay the Ontario benefits and that the arbitrator erred in so finding.
CAA argued that, having elected to take the benefits of its presence in the lucrative Ontario insurance market, Travelers must also take the burdens, one of which is the possibility that it would have to assume financial responsibility under the priority provisions of the Ontario Insurance Act, as CAA submitted the arbitrator had correctly found.
Court of Appeal Overturns Arbitration Decision
The court found that there were several reasons to conclude that the Ontario Insurance Act had no application to the Nunavut policy. The court found that Travelers was not an Ontario insurer for the purpose of the priority provisions of the Ontario Insurance Act and was not obliged to indemnify CAA or to assume CAA’s obligations to the claimant.
As a result, the court allowed the appeal, finding that the arbitrator had erred in law in finding that Travelers was an Ontario insurer required to arbitrate priorities with CAA under s. 268 of the Insurance Act.
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In the event of serious injury following a car crash, retaining a lawyer can help you to get the long-term support you need from your insurance company and the compensation that ought to be paid by the parties at fault for your accident.
At Campbell Litigation, we investigate your claims arising from a car accident, and we seek the compensation you need to recover from your injuries. In the event you have sustained a catastrophic physical impairment or any permanent, serious impairment of any important physical, psychological or mental function, we will help obtain your insurance benefits and fair compensation from those at fault for the motor vehicle accident. We are experienced in handling cases for the most severely injured. We understand the challenges and worries faced on a day-to-day basis by those dealing with newfound hardships.
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