Policy rights

An owner's policy insures the named person and any other person who drives the car with the named person's consent, against liability imposed by law upon the insured named in the contract or the other person for loss or damage. The policy also provides insurance against liability in respect of an automobile not owned by the insured named in the contract, subject to the insurer's stipulations. If a named insured dies, the spouse, personal representative, and temporary custodian of the car are deemed to be the insured under the policy.

• the insurer is not liable for any loss or damage caused by an excluded driver.

Minimum coverage

Every motor vehicle liability policy must have a minimum limit of at least $200,000 for bodily injury, death, and property damage resulting from any one accident. There are also rules about the priority of claims for bodily injury or death versus loss of or damage to property.

Liability under different jurisdictions

If liability arises from the use of the automobile in a province, territory, or jurisdiction outside of Ontario, the insurer is liable up to the minimum limits prescribed for that location and the insured appoints the insurer as their attorney to defend any claims brought against them.

Multiple insurers

The Insurance Act allows a person with a claim against an insured for which indemnity is provided by a contract evidenced by a motor vehicle liability policy, even if they are not a party to the contract, to have the insurance money payable under the contract applied towards satisfaction of the judgment and any other claims against the insured covered by the contract. They may also maintain an action against the insurer to have the insurance money so applied.

A creditor of the insured is not entitled to share in the insurance money payable under any contract unless the creditor’s claim is one for which indemnity is provided by that contract.

It is not a defence to an action under this section that an instrument issued as a motor vehicle liability policy is not a motor vehicle liability policy.

An insurer may pay into court if there are or may be other claims against the insured for which the insurer may be liable, and the insurer may then apply for an order to determine the amount of the insurance money to be paid into court and to whom.

Role of insurer upon a claim

When an insurer denies liability under a motor vehicle liability policy, it shall be made a third party in any action where a claim is made against the insured by any party to the action.

Upon being made a third party, the insurer may contest the liability of the insured to any party claiming against the insured, contest the amount of any claim made against the insured, deliver any pleadings in respect of the claim of any party claiming against the insured, have production and discovery from any party adverse in interest, and examine and cross-examine witnesses at the trial to the same extent as if it were a defendant in the action.

Insured Responsibilities

The insured must give the insurer written notice of an incident with all available particulars within seven days of the incident.

There are conditions that must be met before an action for loss or damage from bodily injury or death arising directly or indirectly from the use or operation of an automobile can be commenced. These conditions include:

• The plaintiff applying for statutory accident benefits, serving written notice of intention to commence the action on the defendant within 120 days after the incident or within such longer period as a court may authorize, and

• Provide the defendant with information prescribed by the regulations within the time period prescribed by the regulations.

An insured who receives a notice shall give a copy of the notice to the insurer within seven days of receiving the notice.

Statutory requirements

The following are statutory (required) conditions of an automobile insurance policy:

• In cases where the insured is not at fault. Recovery is based on the degree of fault of the insurer's insured, as determined under the fault determination rules. The insured may bring an action against the insurer if they are not satisfied that the degree of fault established under the fault determination rules accurately reflects the actual degree of fault or if they are not satisfied with a proposed settlement.

• Regarding occupants of a car:

  • If an occupant of an automobile is insured, they can seek compensation from the insurer of the automobile they are insured.

  • If recovery is not possible under the first scenario, the occupant can seek compensation from the insurer of the automobile in which they were a passenger.

  • If recovery is not possible under the first two scenarios, the occupant can seek compensation from the insurer of any other automobile involved in the incident that led to their entitlement to statutory accident benefits.

  • If recovery is not possible under the first three scenarios, the occupant can seek compensation from the Motor Vehicle Accident Claims Fund.

• Regarding non-occupants (e.g., pedestrians, cyclists, etc.):

  • If a non-occupant is insured under an automobile policy, they can seek compensation from the insurer of the automobile they are insured under.

  • If recovery is not possible under the first scenario, the non-occupant can seek compensation from the insurer of the automobile that struck them.

  • If recovery is not possible under the first two scenarios, the non-occupant can seek compensation from the insurer of any automobile involved in the incident that led to their entitlement to statutory accident benefits.

  • If recovery is not possible under the first three scenarios, the non-occupant can seek compensation from the Motor Vehicle Accident Claims Fund.

Additional notes:

• An insurance company can include exclusions and limitations in their coverage if they deem it necessary.

• There may be a partial payment of loss clause in the insurance contract, where the insurer will pay only a portion of the loss or the amount of loss after deducting a specified sum, as stated in the policy.

• There is a mandatory deductible, where the insurer will only pay the amount of the loss after deducting a specified sum, as required by regulations.

• If a claim is made under any contract other than a motor vehicle liability policy, the insurer must adjust the claim amount with the insured named in the contract as well as any person indicated in the contract.

• If an automobile suffers damage arising from the use of one or more other automobiles, and at least one automobile involved in the accident is insured under a motor vehicle liability policy, the insured can recover damages from their own insurer as though they were a third party.

Note: An insurer can provide excess insurance above the limits of another motor vehicle liability policy.

Ontario Insurance Act s.239-267.2