Introduction

As discussed in our previous post,the fluctuating cost of automobile insurance and the extent to which insured persons can rely on insurance protection is partly dependant on how broadly the legislature defines or court interprets the risks of driving (i.e. the more risk an insurer is deemed to cover, the higher the cost to the insured).

Yet, when people experience tragedy, macroeconomic concerns understandably fall to the wayside. The court is routinely asked to stretch the limits of insurance coverage to protect or compensate a single claimant, potentially creating future uncertainty for both insurers and insured persons.  

In Hunt v.

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.