At the age of 17, the claimant was an occupant of a vehicle insured by Certas that was involved in a single vehicle collision. Her application for accident benefits triggered a priority dispute over whether she was principally financially dependent on either one of her parents, who were not married and had alternated in supporting her over the years. Specifically, the claimant had lived with her mother during the immediate three months prior to the accident, and with her father for the twenty-two months prior to that.
Following a written private arbitration, the Arbitrator concluded that the claimant was equally financially dependent on both parents, such that their respective insurers (Gore and Dominion) were jointly responsible for paying her accident benefits.
Gore and Dominion appealed the decision to Ontario’s Superior Court, arguing that the Arbitrator failed to take into account the claimant’s grandmother’s contributions in the form of housing. Specifically, the claimant, her mother and her mother’s partner lived in the grandmother’s house “rent free”. The Court dismissed this argument, noting the grandmother’s contribution was to the claimant’s mother and, as an uninsured non-party, any non-obligatory, discretionary contribution by the grandmother was legally irrelevant to the dispute.
Gore and Dominion also argued that a finding of “equal priority” was not contemplated in the Arbitration Agreement. However, the Court noted the Agreement did not specifically exclude such a finding and that the Insurance Act, R.S.O. 1990, c. I.8 includes several provisions that consider a dependant minor having coverage under two policies.
The Court acknowledged that a finding of equal priority did not easily fit into standard insurance payment procedures, since two insurers would have to figure out how to divvy up accident benefits that had already been paid out by one insurer.
In practice, where two or more insurers rank equally in priority, a claimant usually exercises the absolute discretion afforded to them under s. 268(4) of the Insurance Act and chooses from which insurer they would like to claim benefits. However, as this case reminds us, this choice is not mandatory but optional.
Insurers need to therefore ensure their Arbitration Agreements explicitly exclude an “equal payment” finding, or they need to be proactive in amending their payment mechanisms to allow for flexibility in anticipation of disputes that can end in a tie.
See Gore Mutual v. Dominion and Certas Home, 2024 ONSC 5239 https://canlii.ca/t/k6zvl
