Sued and Have No Insurance in Ontario: What Happens Next

If you are sued and have no insurance in Ontario, the questions arrive together: how long is there, who pays, and what can be taken. This guide covers the general rules for any kind of claim. It is educational information, not advice about your case.

What "no insurance" can mean when you are sued

Short definition: a lawsuit with no insurance behind it is a civil claim in which no insurer has taken on the defence or agreed to pay, so the person named in the claim carries both the work and the risk.

It can mean a person never had a policy, a policy lapsed, or an insurer says the claim falls outside the policy. Whether a home, tenant, auto, umbrella, business or employer policy responds turns on its wording, which a lawyer or the insurer can review.

For motor vehicle policies, the Insurance Act requires an insured whose automobile is in a police-reportable incident, or one the insured intends to claim for, to give the insurer written notice with all available particulars (s. 258.1(1)). It is due within seven days, or as soon as possible afterwards if incapacity prevented it (s. 258.1(2) and (3)). Other policies set their notice terms in the contract.

If a policy does apply, the process changes a great deal. See being sued when you have insurance and, for car cases, being sued after an uninsured accident.

Sued and have no insurance in Ontario: the timetable still runs

In a Superior Court action, the time to deliver a statement of defence generally depends on where the defendant was served (r. 18.01). The rule has exceptions, including r. 18.02, r. 19.01(5) and r. 27.04(2).

A defendant who means to defend can serve a notice of intent to defend within that same period, which adds ten days to the time for the defence (r. 18.02(1) and (2)). In Small Claims Court, a defendant who wishes to dispute the claim has 20 days from service to serve and file a defence (Small Claims Court Rule 9.01). The deadline in a real case depends on the facts, and a lawyer should be asked to confirm it without delay. See being served with a statement of claim.

What happens if a lawsuit is ignored

If a defence is not delivered in time, the plaintiff can file proof of service and ask the registrar to record the defendant as in default (r. 19.01(1)). Until that happens, a defence can still be delivered late (r. 19.01(5)).

Once noted in default, a defendant is deemed to admit the truth of the factual allegations in the claim, and generally needs leave or the plaintiff's consent to deliver a defence or take other steps. The exception is a motion to undo the default or a resulting judgment (r. 19.02(1)).

The registrar can then be asked to sign judgment for a debt or liquidated demand in money (r. 19.04(1)). Other claims, such as unliquidated damages, go to a judge by motion (r. 19.05), and deemed admissions alone do not entitle the plaintiff to judgment unless the facts do (r. 19.06).

The court may set aside the noting of default or a default judgment on just terms (r. 19.03(1) and 19.08), and may extend or shorten time limits (r. 3.02(1)). That is the court's decision. See default judgment and how it is set aside.

Who pays when there is no insurance

With no insurer involved, defence costs and damages fall on the person sued unless some other policy or party responds. Subject to any Act or rules, the court has discretion over costs, including by whom and to what extent they are paid (Courts of Justice Act s. 131(1)).

Where the fault of two or more persons caused or contributed to damages, the Negligence Act makes those found at fault jointly and severally liable to the person who suffered the loss. Absent a contract, they contribute between themselves by degree of fault (s. 1). A lawyer can assess whether that applies to a particular claim.

Can they take my house or garnish my wages after a judgment?

Rule 60.02(1) lists several ways to enforce a court order to pay or recover money, including these:

Under the Wages Act, 80 per cent of a person's wages are exempt from seizure or garnishment (s. 7(2)), and 50 per cent in enforcing a support or maintenance order (s. 7(3)). A judge can increase or decrease the exemption on a motion (s. 7(4) and (5)).

For property, the Execution Act exempts certain property of a debtor who is not a corporation, at the debtor's option. Examples are necessary clothing, household furnishings and appliances, tools used to earn income, and one motor vehicle, the last three up to prescribed values (s. 2(1)); above those values the property is subject to seizure and sale (s. 2(1.1)). A principal residence is exempt if the debtor's equity does not exceed a prescribed amount (s. 2(2)), and above it is subject to seizure and sale (s. 2(3)). The dollar figures are set by regulation and can change, so this guide does not state them; a lawyer can confirm them. See judgments against you and enforcement.

A writ of seizure and sale lapses six years after it is issued unless renewed (r. 60.07(6) and (8)). The Limitations Act, 2002 sets no limitation period for a proceeding to enforce a court order (s. 16(1)(b)); a lawyer can confirm how that applies to a particular judgment.

Licence consequences for motor vehicle judgments only

The Highway Traffic Act deals with Ontario judgments for injury, death or property damage occasioned by a motor vehicle or street car. If such a judgment is not satisfied within fifteen days of becoming final, the driver's licence is suspended by the Registrar after notice, and the suspension is tied to the minimum liability limits the Insurance Act requires (s. 198(1)). Exceptions include a person indebted to the Motor Vehicle Accident Claims Fund (s. 198(2)), and the court may allow payment by instalments (s. 198(3)).

Options in outline when no insurer is involved

People in this position usually weigh several paths:

1. Defending the claim. A defence can dispute the facts, the amount, or responsibility.
2. Mediation. Mandatory mediation under Rule 24.1 applies to certain actions, including those started since January 1, 2010 in Ottawa, Toronto or Essex County, subject to listed exceptions (r. 24.1.04).
3. Settling and offers to settle. Under Rule 49, an unaccepted offer made at least a week before the hearing can carry costs consequences if the judgment is as favourable as or more favourable than a plaintiff's offer (r. 49.10(1)), or as favourable as or less favourable to the plaintiff than a defendant's offer (r. 49.10(2)), unless the court orders otherwise. See offers to settle and costs.
4. Court-ordered payment terms after judgment. In Small Claims Court, the court may stay enforcement on just terms, and may vary the times and proportions of payment if satisfied the debtor's circumstances have changed (Rule 20.02(1)).
5. Insolvency options. A bankruptcy discharge releases the bankrupt from claims provable in bankruptcy, subject to listed exceptions (Bankruptcy and Insolvency Act s. 178(2) and (1)). The exceptions include court awards of damages for bodily harm intentionally inflicted, sexual assault, or resulting wrongful death (s. 178(1)(a.1)). A lawyer or trustee in bankruptcy can confirm whether a debt is affected. See bankruptcy and judgment limits.

Small Claims Court or Superior Court

The Small Claims Court has jurisdiction over money claims that do not exceed a prescribed amount, not counting interest and costs (Courts of Justice Act s. 23(1)(a)). Ontario's Small Claims Court page states that the limit increases from $35,000 to $50,000 effective October 1, 2025, and that larger claims go to the Superior Court of Justice unless the claimant waives the excess. That figure is accurate as of the date of this article; confirm the current amount.

Why timing matters: limitation periods

Section 4 of the Limitations Act, 2002 bars a proceeding begun later than the second anniversary of its discovery date, unless the Act provides otherwise. Under s. 5(1), the discovery date is whichever comes first: the day the claimant first knew of the loss, its cause, who was responsible and that suing was appropriate, or the day a reasonable person in the same position ought to have known those things.

When it is worth talking to a lawyer

People typically seek advice when:

• a statement of claim, notice of default or other court document has arrived and a deadline may be running;
• an insurer has refused or has not answered, and it is unclear whether a policy applies;
• the amount claimed is significant;
• a judgment, garnishment notice, writ or notice of examination has been served;
• someone else may share responsibility;
• debt options such as a proposal or bankruptcy are being considered.

What to gather

• Every court document, with the date and manner each was received
• All insurance policies, renewals, cancellation notices and insurer letters
• Letters, emails, messages and contracts about the dispute
• Recent income, asset and debt records