When someone has a motor vehicle accident (MVA) wherein there are injuries, you can claim accident benefits (AB) through the automotive policy. Sometimes it can be confusing as to which policy should be paying these benefits, resulting in a “priority dispute”. You have to meet the definition of “insured person”.
As per the Statutory Accident Benefits Schedule (SABS), an insured person means “the named insured, any person specified in the policy as a driver of the insured automobile, the spouse of the named insured, and any dependant of the named insured or spouse, if the named insured, specified driver, spouse or dependant, is involved in an accident in or outside Ontario that involves the insured automobile or another automobile.” If you do not have your own policy, you may qualify as a dependant on another policy. A person is dependent upon another if that person is principally dependant for financial support or care by another person. In addition, dependency is further assessed as to:
(i) amount of dependency;
(ii) duration of dependency;
(iii) financial or other needs of the alleged dependant; and
(iv) the ability of the alleged dependant to be self-supporting.
So what is a “priority dispute”? To make a claim for ABs you need to submit the completed Application for Benefits (OCF-1) and the Disability Certificate (OCF-3) to the AB insurer to get things started. In accordance with Section 268 of the Insurance Act, the insurer in which you submit the application to is called the “first insurer” and must immediately respond and commence coverage. If that insurer is of the opinion that the ABs should be covered by another insurer, it must give written notice within ninety days of receipt of a completed application for benefits to another insurer. The insurer must also give written notice to the insured of this dispute. It is then up to the first insurer to continue to pay benefits to the insured until the priority dispute is resolved. This dispute is entirely between the insurers and the insured need not worry about not receiving benefits. Should it be determined that the other insurer is responsible for payment of benefits, then the file is transferred over to the new insurer and benefits continue to the insured without interruption.
Now what about qualifying as a dependant? If you are a young child then you are a dependant but what if you are an adult child? You can live with your parents and have a job but still be a dependant. If you are not earning enough money to pay your rent or feed yourself and your parents are giving you money to get by, then you are financially dependent upon your parents and, therefore, you would qualify as a dependant under their auto policy.
What if you do not live with your parents? You may still qualify as a dependant. In the case of State Farm v. Bunyan, 2013 ONSC 6670, Mr. Bunyan did not live with his mother but still qualified as a dependant under her auto policy. Over the years, Mr. Bunyan lived with his mother on and off for periods of time and relied on her to support him as he was not earning enough to support himself. For a period he moved away and lived with his girlfriend and they had a child and Mr. Bunyan started a construction company. They could not make ends meet so they moved back home to live with his mother. Later they moved to Alberta with hopes to secure work but this did not work out so the girlfriend and child moved back to Ontario to live with Mr. Bunyan’s mother again. Mr. Bunyan stayed in Alberta alone and then returned to Ontario in the late summer of 2006 and lived with his mother for about one year. Mr. Bunyan then moved back to Alberta to find work and bought a second-hand car but could not afford insurance. He did not have a valid driver’s license and was eventually stopped by police and then could not drive and had to hitchhike. Mr. Bunyan had very little money and his mother was sending him money to cover his day-to-day expenses.
On September 21, 2007, while living in Alberta, Mr. Bunyan was a pedestrian who was struck by a truck that was insured by Manitoba Public Insurance Corporation (MPIC). Mr. Bunyan suffered catastrophic injuries. He applied for his ABs through his mother’s insurer, State Farm, who began to pay the benefits and in 2008 accepted the injuries as catastrophic. Later a priority dispute arose when State Farm applied to the court for an order that Mr. Bunyan was not a dependant and his benefits should be covered by MPIC.
At the time of the accident, Mr. Bunyan had been working in Alberta for about three weeks but had almost no money in his bank account. He had an alcohol problem and it was expected that the little money he did earn was mostly used to buy alcohol and cigarettes. He had moved to Alberta to establish himself and become independent. Unfortunately his alcohol problem was affecting his ability to keep a job and he had continued to rely on his mother to send him money for his expenses. Based on Mr. Bunyan’s history, had the MVA not occurred, Mr. Bunyan would likely have had to continue to rely on his mother to make ends meet.
In State Farm v. Bunyan it was found that Mr. Bunyan was not capable of being self-supporting and more than half of his day-to-day expenses were being met by his mother in the form of shelter and food. He was not able to sustain employment, pay his bills and achieve independence and would have eventually moved back to Ontario to live with his mother again. It was concluded that Mr. Bunyan was still principally financially dependent upon his mother at the time of the accident and was thus an insured person under his mother’s policy, which was held by State Farm. Therefore, this priority dispute between State Farm and MPIC was resolved by the court by confirming that Mr. Bunyan was a dependant under his mother’s policy.