Canadian provinces have no legislative competence to regulate automobile insurance beyond their own borders. Nevertheless, tractor-trailers rumble across the country to deliver goods, families pack into hatchback sedans to vacation in distant destinations, and business teams disembark airports into rental cars to attend their next meeting. Borders are ever-increasingly transient.

In this globalized context, it is important for Ontario insurers to understand their exposure both within the heartland province and beyond. This article briefly considers Ontario’s loss transfer scheme as it applies to accidents outside of Ontario.

The no-fault scheme

Ontario’s current loss transfer scheme is a legislative response to “no-fault” automobile insurance.

Introduction

Many risks associated with driving a vehicle are intuitive; some are not.

Imprecision in identifying the risks of driving influences how insurers assess the value of automobile insurance. A recent Ontario Superior Court decision, Gilbraith v Intact Insurance Company, reminds insurers and insured persons how difficult it can be to properly assess and categorize risk at the outset of an insurance relationship.

This case will likely rise through appellate courts in Ontario, which provides an opportunity for the courts to clarify the risks that an auto insurance policy will reasonably cover.  

Gilbraith v Intact Insurance Company

Stephanie Gilbraith was walking along a sidewalk with a friend when a vehicle approached her from the opposite direction.

Can an insurer deny all Section B benefits if an insured agrees to attend an IME on conditions that conflict with the protocol of the examining medical practitioner? The Alberta Court of Queen’s Bench had occasion to consider this in Greenidge v Allstate Insurance Company, 2018 ABQB 266 [Greenidge], and answered this question in the affirmative. More recently, the Court of Appeal in Greenidge v Allstate Insurance Company, 2019 ABCA 52, heard the appeal of that issue and also answered the issue in the affirmative. An insured who conditions their compliance with the Section B policy on conditions that do not accord with an election made by the insurer can disentitle that insured from further benefits.

In the recent Ontario Court of Appeal case, TD General Insurance Co. v. Intact Insurance Co., [2019] ONCA 5, the passenger of a boat sustained injuries when the boat struck the shoreline. 

The passenger sued both the driver and the owner of the boat.  Two insurance policies were triggered by the loss. The owner of the boat held a TD insurance policy that covered the driver, who was driving the boat with the owner’s permission. The driver was also covered by his own homeowner’s policy, issued by Intact.

The two policies had identical “other insurance clauses”. The clauses provided as follows:

If you have other insurance which applies to a loss or claim, or would have applied if this policy did not exist, this policy will be considered excess insurance and we will not pay any loss or claim until the amount of such other insurance is used up.

• Introduction

In Windsor v. Portage La Prairie Mutual Insurance Company, 2017 ABPC 316, the Plaintiff claimed indemnification under a residential insurance policy by the Defendant when unknown persons broke into her garage and stole some items including some prop guns. 

As a brief background, Mr. Wendland who was not named in the Action, signed a promissory note on June 19, 2014, pursuant to which he agreed to pay the Plaintiff $25,000.00 and interest at an unspecified rate, to secure a repayment of funds later loaned to Wendland in an amount totalling $24,175.81.  Wendland had given the prop guns to the plaintiff as security for the loan.