Can I apply for Accident Benefits?

Learn about the legal requirement that must be satisfied in order for someone to be able to apply for accident benefits and some recent cases where it has been applied

Accident benefits are intended to facilitate immediate treatment and compensation after an accident. Liability is irrelevant. In most cases, the AB insurer is the injured person’s insurer. Unlike a tort claim, the injury does not have to be permanent and serious. The governing legislation is the Statutory Accident Benefits Schedule (or “SABS”), a regulation under the Insurance Act (or “IA”).

In order to apply for accident benefits, one has to have incurred an injury that was as a result of the direct use or operation of an automobile (definition of “accident”; SABS, s. 3(1)). Let us examine a couple of instances of where this definition was applied by the License Appeal Tribunal (or “LAT”) to either grant or deny an appeal by an injured person of the AB insurer’s denial.

In 18-002 501 v. Intact Insurance Company (2019), the AB insurer denied the injured party’s claim and the LAT affirmed the denial. The injured party was an uber driver who had been waiting in his vehicle to pick up two customers when two men approached his vehicle asking if he was an uber driver and, after he said yes, they dragged him out of his car and assaulted him. A witness called police. As his injury was not caused by the direct use or operation of an automobile, he did not satisfy the SABS definition of accident and, therefore, was not entitled to accident benefits.

In P.H. v. Aviva Insurance Company of Canada (2020), the AB insurer denied P.H.’s claim but she successfully appealed the denial to the LAT. From inside her house, she heard a crash outside. As it turned out, a vehicle had collided with her patio causing it to dislodge from her house. When she attempted to step onto her patio to investigate, she fell through the crack between her damaged patio and her house. Since her injury was caused by the direct use or operation of an automobile, she satisfied the SABS definition of accident and, therefore, was entitled to accident benefits.

In L.L.B. v. Intact Insurance Company (2020), the AB insurer affirmed part of L.L.B.’s claim and denied another part and the LAT affirmed this decision. The injured party worked on a TV production crew. On the day in question, her duty was to supervise three parking spaces. When a driver, who was not authorized, parked in one, she explained to him that he was not allowed to park there. He hit her body when he opened his door (the first phase of the incident) and came outside his vehicle and assaulted her (the second phase). She claimed accident benefits for physical injuries to her in the first phase and both physical and psychological injuries in the second phase. The AB insurer affirmed her claim in relation to the first phase but not the second. The LAT agreed because the second phase was not an accident within the meaning of SABS.

It can be difficult for those who are untrained in law to navigate the complex statutory requirement for entitlement to accident benefits. Have you been injured as a consequence of someone else’s use or operation of an automobile? Contact Azimi Law today for a thorough case review.

Allstate Insurance v. TD Home and Auto Insurance, 2020 ONSC 6969 – Case Comment

An example of where insurance companies challenge whether or not they are responsible for paying accident benefits

In some cases, more than one insurance company is involved. In a claim for accident benefits, they may disagree about which of them is the priority insurer (or proper insurer to pay the benefits).

On May 25, 2015, DG had a MVA while driving a vehicle leased by his fiancée, and insured by Allstate Insurance (or “Allstate”), on a highway in Michigan. DG owned another vehicle that was insured by TD Home and Auto Insurance (or “TD Home”). DG and his fiancée resided together in Ontario. DG applied for accident benefits from Allstate.

Section 59 of SABS entitles the injured person, if they meet certain criteria, to elect to receive accident benefits available in the jurisdiction (or place) in which the accident occurred as opposed to those available in Ontario. DG decided that Michigan benefits were more generous in his circumstances and so he elected to take Michigan benefits instead of Ontario ones.

Allstate paid some benefits but disputed whether it was the priority insurer. The law gives insurance companies two pathways to enter into this kind of dispute. S. 275 of the Insurance Act (or “IA”) allows them to enter into private arbitration. S. 7 of O. Reg. 283/95 allows them first to try to resolve it amongst themselves and then enter private arbitration.

Allstate forwarded a Notice to Applicant of Dispute between Insurers to both DG and TD Home. DG had 14 days to respond but did not. TD Home accepted priority. Allstate sought reimbursement from TD Home for the benefits it had paid. TD Home paid Allstate for the Ontario-level benefits but not Michigan-level ones. This meant reimbursing Allstate $39,384 less.

Allstate sought recovery of the $39,384 plus interest, legal expenses and costs and was successful at the arbitration hearing. TD Home appealed the arbitral award to the SCJ.

TD Home argued as follows: the s. 59 criteria include the criteria prescribed for recovery under the law of the jurisdiction in which the accident occurred; and Michigan’s MV insurance legislation states that Michigan-level benefits are not available to persons not resident in Michigan; and, in addition, TD Home did not sign Michigan’s Certification List of insurers who agreed to pay Michigan-level benefits; thus, TD Home is not liable to pay DG Michigan-level benefits.

In its appellate function, the court first had to ascertain whether the arbitrator even had the jurisdiction (or power) to order reimbursement. It found that the arbitrator indeed had this power pursuant to s. 31 of the Arbitration Act and the insurance companies’ arbitration agreement.

Next, the court had to determine the standard of review and, having found it is reasonableness, had to determine whether or not the arbitral award was reasonable or not. If it was reasonable, the court would affirm the lower decision. If it was not, the court would exercise an appellate power.

The court rejected TD Home’s argument because the Preamble of s. 59 of the IA provides that, for the purpose of the section, a person is insured in the jurisdiction in which the accident occurred.

The court found the arbitral award to be reasonable, affirmed it and dismissed TD Home’s appeal.

The court agreed with the arbitrator’s reasons for his award, including that TD Home’s position:

• would undermine the insured’s right to election under s. 59 of the IA;
• would encourage insurers to reduce the scope of coverage under SABS;
• would increase the complexity of determining elections by requiring assessment of foreign jurisdiction regimes; and
• should be rejected in favor of wider and easier to understand coverage to Ontario residents.

Further, the court noted the following additional reasons:

• allowing the recovery in this case gives effect to the plain meaning of s. 59 of the IA;
• to conclude otherwise would discourage insurers from prompt and fair payment of benefits; and
• the exposure to repayment of benefits by the priority insurer encourages the priority insurer to determine its position as quickly and efficiently as possible.

Therefore, TD Home had to reimburse Allstate for the $39,384 plus $6,000 in legal costs.