Toronto Injury Lawyer Blog
Ontario has a no fault system of accident benefits if you’ve been involved in a car accident.
Understanding the concept of “no fault” is hard to grasp (even for lawyers!).
You would think that if you’re not at fault, then the at fault driver’s insurer should pay for everything.
But, that’s not how things work in Ontario’s no fault system. We have a first party pays system.
What this means is that regardless of fault, your own car insurer is responsible to pay for accident benefits in your car accident case.
This means that the other driver could have been drunk, high, on his/her cell phone, having run a red light; and still your own car insurer is the primary payor for accident benefits.
Even more strange is that if you had collateral benefits at the time of the accident, such as health, disability or anything else through work; those benefits kick in BEFORE the car insurance benefits kick in. Even though your collateral benefits have nothing to do with car insurance, those collateral benefits must be used up before the car insurer has to pay anything. How does that make sense? It’s like a disability insurer telling you that they will not pay any disability benefits until you’ve purchased 3 lottery tickets to see if you win. In the event you win, then they disability insurer does not pay because you’ve been paid lottery winnings. If you loose the lottery, and only once you’ve lost and submitted proof of losing that they will pay. All of these laws defy logic, but this is how Ontario’s archaic system of accident benefits has been designed.
There is a common theme for these accident benefits. They don’t make sense. You can throw all logic out the door when it comes to understanding accident benefits because they aren’t logical. Accident benefits and their administration has been designed in such a way as to benefit car insurers and not innocent accident victims. This is confounding because the Insurance Act and the SABS (the laws which govern accident benefits) are supposed to be consumer protection legislation. That was the intent of introducing these accident benefits in the first place. Yet, we have drifted far away from the intent of the legislation. Instead of acting the in best interest of the consumer to protect innocent accident victims and to provide them with the care they need; we have shifted to a landscape which instead is designed to minimize the overall exposure of large insurance companies so that they can maximize their profits while giving the illusion that they are helping innocent accident victims.
Strong words right? Well, if you consider that premiums continue to jump, savings have not been passed along to consumers, inflation is a real thing, yet the available benefit under a standard automobile policy of the income replacement benefit $400, and the non earner benefit $185 has not increased with inflation or with the cost of living, you would be hard pressed but to think otherwise.
Take a look at the OCF-1 Application for Accident Benefits. The way that the questions are drawn up screams passing the buck off to another insurer, or to another party. You quickly find out with car insurance claims that one of the strategies of defence is to pass the blame or risk over to another party. Here are a few examples which for a lay person sound like irrelevant questions; but; if you really think about it; these are just ways for the first party insurer to minimize their exposure or to get out of the claim altogether.
Did the accident occur while you were at work?
Did you file a claim with the Workplace Safety and Insurance Board (WSIB)?
The reason these two questions are important is because if there is a way for the car insurer to “pass the buck” over to WSIB then they will do so. If your accident took place at work, then perhaps there’s an angle for the car insurer not to have to pay at all. The fact that these types of questions are built in to the standardized forms ought to tell you who had a big say in preparing these forms in the first place. It’s presents an easy out for the car insurer right off the bat.
Here is the best example of passing the buck questions from the OCF-1 Application for Accident Benefits which are built right in to the standard forms themselves:
Are you covered under any of the following automobile policies?
Your own policy
Your spouse’s policy
The policy of any person on whom you are a dependent (ie a parent)
A policy that lists you as a driver (ie a friend)
Your employer’s policy or a spouse’s employer policy (ie a company car)
A policy insuring long term rental cars (for rentals exceeding 30 days)
If you answer in the affirmative to the last 5 questions, the primary insurer who you believed to be covering the claim will have an opening to transfer the responsibility to pay to another insurance company. Like a game of insurance hot potato. The strategy is to look for an opening to pass the buck. Why should you pay or take responsibility for someone’s accident case, when another car insurer can do so. These are called priority disputes. Which insurer will assume priority (responsibility) over the claim. These priority disputes can be resolved quickly, or not. They can add undue and unnecessary delay to a Plaintiff’s case. From a Plaintiff’s perspective, they really aren’t too concerned with who pays the claim, so long as the claim itself gets paid. In theory, insurers are not supposed to hold up claim on account of these priority dispute. The law requires that they pay now, and argue later. Unfortunately, the system is not perfect. There is often a transition period between insurers which creates confusion and delay. Plaintiffs don’t understand why or how their case went from Insurer “A”, to Insurer “B”. They were familiar with dealing with one insurer and adjuster; and now their case is being transferred to a completely different insurer and adjuster for reasons which are hard to understand. The system isn’t perfect at all and is incredibly confusing.
