How Previously Married Claimants are Treated in the Context of Priority Disputes – the First of our Three-Part Series Dealing with the Definition of “Spouse” in the Insurance Act.
The question of which insurer has priority of, or is liable to pay, an accident benefits claim frequently hinges on seemingly straightforward definitions or legal relationships. However, determining whether individuals fall within the scope of these definitions and relationships is often a more nuanced and complex process rather than a straightforward one. A prime example is determining one’s spousal status.
A claimant’s spousal status can have significant implications in the context of accident benefits coverage. Consequently, understanding how the Insurance Act (the “Act”) defines a “spouse” and how one’s spousal status affects their access to coverage is crucial for resolving priority disputes.
Each part in this three-part series will explore one of three definitions of ”spouse” under the Act, and its implications for determining priority over AB claims. In this first part of the series, we focus on the definition pertaining to claimants who have been married and the key principle that applies to them – that once they are a “spouse”, they forever remain a spouse until death or divorce.
But First: What is a “Spouse”?
The Statutory Accident Benefits Schedule (SABS) defines the term “spouse” in the same way it is defined in Part VI of the Act. As such, we look to section 224(1) of Part VI of the Act, which defines a “spouse” as either of two individuals who:
- are married to each other;
- have entered into a marriage to each other that is voidable or void, in good faith on the part of the person asserting a right under the Act; or
- have lived together in a conjugal relationship (outside of marriage) continuously for at least 3 years, or in a relationship of some permanence and are the biological or adoptive parents of a child.
The meaning of “spouse” under the Act is clearly much broader than one may realize when they consider the term spouse. It goes well beyond the confines of traditional marriage to include long-term cohabitation and relationships involving children, reflecting the ever-evolving nature of family structures. However, for the purposes of this segment, we zero-in on definition #1 – individuals who are married. (Don’t worry; Parts Two and Three of this series will deal with definitions #2 and #3.)
Definition #1: “Married to Each Other”
Determining whether a claimant is a “spouse” under any of the definitions in section 224(1) can be a complex exercise, but being “married” seems pretty straightforward, right? Not when it comes to accident benefits coverage.
For a claimant to be “married”, they must have entered a marriage that, as of the time of the accident, has been solemnized and registered in accordance with the Marriage Act. That is, the marriage must be conducted either under the authority of a license (issued in accordance with the Act, of course) or through the publication of banns. The marriage must then be entered into a register; only then are the couple considered “married to each other”.
Notably, religious marriages on their own do not meet these criteria. As such, they do not result in two people who are “married to each other” for the purposes the Act.
Why Does it Matter: Spousal Status in the Context of Priority Disputes
A true appreciation for why spousal status matters for the purpose of priority disputes requires a quick overview of the basics.
Recall, section 268(2) of the Act sets out a specific hierarchy to be followed when determining which insurer is liable to pay an AB claim. At the top of the hierarchy, or first in line to pay, is a claimant’s own insurer. Under this tier, recourse is available to anyone who is a named insured (whether actual or deemed due to regular use of a vehicle), a spouse of a named insured, a dependent of a named insured or of a named insured’s spouse, or a driver otherwise listed/specified on the policy. If there is no recourse under this first tier, the claimant next as recourse against the insurer of the vehicle they were in at the time of the accident (or, in the case of a claimant who was a pedestrian or cyclist at the time of the accident, the insurer of the vehicle that struck them). If there is no recourse under this second tier, the claimant then has recourse against the insurer of any vehicle involved in the accident. And finally, if there is no recourse against any involved vehicle, the claimant has recourse against the Motor Vehicle Accident Claims Fund.
The important takeaway from section 268(2), for our purposes, is that a claimant’s spousal status can put an insurer at the top of the priority pyramid and first in line to pay. It’s no wonder then that spousal status is often at the center of disputes between insurers – especially when it comes to “married” claimants.
Separation vs. Divorce: A Key Distinction
Cases involving separated individuals are a prime example of such disputes. They are wrought with conflict and confusion as to whether the individuals are “spouses” under the Act; the common misconception being that separated individuals are no longer “married to each other” and, consequently, are no longer “spouses”. To state the obvious, this is incorrect.
Sections 12 and 14 of the Divorce Act stipulate that two individuals cease to be married to each other when a divorce dissolving their marriage is not only granted but takes effect. This typically happens 31 days after the judgment granting their divorce is made, although there are exceptions.
Time and again, arbitrators and courts have relied on this definition in determining when a marriage has ended, if it has ended at all. The consensus is that, even if two partners are no longer living together or maintaining a romantic relationship, and even where there is a separation agreement signed by them, they remain “spouses” for the purpose of the Insurance Act unless or until their relationship has been formally dissolved through divorce. Alternatively, they will cease to be “spouses” when one of them passes away.
Kamstra v. Allstate (1996)
An early example that drives this point home is Kamstra v. Allstate (1996). In this case, Arbitrator Rudolph had to determine whether a separated spouse was entitled to coverage under her former partner’s policy. He reviewed the definition of “spouse” in section 224(1) of the Act and found that it meant that “a couple that are married to each other continue to be spouses of each other until a divorce judgement had been obtained or until death.” Importantly, he noted that just because a couple is separated at the time of an accident (as was the case, in this arbitration), it does not affect their spousal status for the purposes of the Act and the SABS. He ultimately held that, since they had not yet divorced prior to the accident, the separated partners were still “spouses” under the Act, affirming that spousal status continues until divorce or death.
Certas v. Allstate (2004)
You may be wondering, ‘but what if the separated parties specifically exclude each other from coverage under their policies in a separation agreement?’
This was considered a few years post-Kamstra in Certas v. Allstate (2004). In this case, Arbitrator Malach had to determine whether the claimant was a “spouse” of his former wife for the purposes of the Act, despite having been separated and living apart for 10 years prior to the accident. Notably, the former partners had even entered into a separation agreement at that time which stated that the claimant was effectively removed from their insurance policy; the intention being that the former partners were releasing each other from any and all claims arising out of their marriage. During the arbitration, it was argued that the former partners had “specifically contemplated the issue of automobile insurance”, as evidenced by the term in their agreement, and they were therefore no longer “spouses” under the Act. Furthermore, the claimant had even entered at least one other common law union, resulting in the birth of a child, since his separation from his former wife.
Despite this, Arbitrator Malach concluded that the former partners were still “spouses” for the purposes of section 224(1). They never divorced. Their marriage therefore continued, despite the significant passage of time since their separation, and despite their intention (as indicated in their separation agreement) to exclude the claimant from coverage under his former wife’s insurance, highlighting once again that a divorce (or death) is an absolute requirement for a marriage to be considered dissolved.
Conclusion & Key Takeaways
The distinction between separated and divorced individuals evidently plays a huge role in priority disputes involving claimants who have been previously married. Unless a divorce order is issued by a court, a separated claimant is still entitled to AB coverage under their former partner’s automobile insurance policy (unless, of course, their former partner has passed away).
This distinction therefore also underscores the importance of thorough investigations at the outset of an AB claim since, depending on whether the claimant is a “spouse” of a person insured under another policy (or is dependent on such person’s “spouse”), another insurer should very well be handling – and paying – the AB claim instead.
Careful investigation when assessing spousal status should include:
- Reviewing the OCF-1. What ‘marital status’ has the claimant ticked off?
- Conducting an AutoPlus search on the claimant. Look for policies under which the claimant was or is listed, paying attention to details such as dates of birth and policyholder names that may suggest a marital relationship.
- Requesting the claimant’s tax returns. Are they filing their taxes as single, married, separated, or divorced?
- Requesting the claimant’s divorce order (if applicable). Ensure it was in effect prior to the accident.
- Requesting the claimant’s attendance at Examination Under Oath.
A final point: When it comes to individuals who have been married, the case law is clear that arbitrators and courts are reluctant to consider any definition of “spouse” other than what has been legislated; the consensus being that amending the Insurance Act to deal with situations where former spouses have separated and even entered into separation agreements, without divorce, is a job for the Legislature. Unless the Legislature does so, it is unlikely that an arbitrator or court will sway from the Act. Until then, previously married spouses remain “spouses” – ‘til death, or divorce, do them part.
Stay tuned for Part Two of this series, which will deal with the next definition in section 224(1): marriages that are void or voidable!
See Kamstra v. Allstate Insurance Company and State Farm Mutual Automobile Insurance Company (1996) (Arbitrator J. Rudolph).
See also Certas Direct Insurance Company v. Allstate Insurance Company (2004) (Arbitrator Malach).
