Ontario court determines insured’s claim for “underinsured” coverage under Family Protection Coverage endorsement

A statutory cap on damages recoverable in a motor vehicle accident results in an insured being “underinsured” pursuant to the OPCF 44R Family Protection Coverage endorsement in Ontario to the extent damages exceed that cap.

Insurance law – Automobile insurance – Coverage – Underinsured motorist – Interpretation of policy – Statutory provisions – Jurisdiction – Conflict of laws

Hartley v. Security National Insurance Co., [2016] O.J. No. 1336, 2016 ONSC 1812, Ontario Superior Court of Justice, March 14, 2016, G.E. Taylor J.

The insureds were involved in a motor vehicle accident in the state of Minnesota. They sustained serious personal injuries. They settled the claims in Minnesota for a total of $600,000; they received the net sum of $463,889.18. The insureds then commenced an action against their insurer in Ontario for under insurance coverage pursuant to the OPCF‑44R Family Protection Coverage endorsement.

The parties sought an order to determine questions of law raised by the pleadings. Specifically, the parties sought a determination as to whether the legal expenses incurred by the insureds in the commencement and resolution of the action in the United States could be claimed as against the defendant in the Ontario proceeding as special damages. They also sought a determination as to whether the defendants in the action in the United States were “underinsured” as that term is defined in Ontario.

In Minnesota, there is a $500,000 cap on damages for an individual plaintiff in a motor-vehicle accident. The court found that to the extent the insureds’ damages were capped in Minnesota they were underinsured for any damages in excess of that amount. The court also held that costs incurred in relation to the Minnesota action could be claimed as special damages provided the gross amount of the settlement in the Minnesota action is deducted from the limit of insurance available pursuant to the Family Protection Coverage endorsement.

This case was digested by Cameron B. Elder and edited by David W. Pilley of Harper Grey LLP. If you would like to discuss this case further, please feel free to contact them directly at [email protected] or [email protected] or review their biographies at http://www.harpergrey.com.

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