A vehicle insurer was ordered to pay Statutory Accident Benefits (SABS), when the policyholder’s son was catastrophically injured in a pedestrian accident, even though the son was not currently residing in the policyholder’s home. The Court found that the son still met the definition of a ‘dependant’ because he continued to receive substantial financial support from his mother, the policyholder, and had not yet set up permanent residence in another place.
A pedestrian was hit by a truck and suffered catastrophic injuries after recently moving to Alberta. The injured man claimed statutory accident benefits as a dependant under his mother’s vehicle insurance policy with State Farm. This case involved three legal jurisdictions since the claimant’s mother resided in Ontario and was insured under an Ontario policy; the accident occurred in Alberta; and the truck was licenced and insured in Manitoba.
After the accident, the insurer accepted that Mr. Bunyan’s (the claimant’) injuries were catastrophic and eligible for the highest level of benefits. State Farm initially paid accident benefits to Mr. Bunyan, but after several years the insurer moved for an order to have the claimant declared ‘not a dependant’ under his mother’s policy and therefore ineligible for coverage.
In State Farm v. Bunyan, Mr. Bunyan argued that he is a dependant under the terms of the policy. He also argued that it would be unfair for the insurer to terminate his benefits five years after commencing payment, particularly since he relied on State Farm’s approval of his claim and has now missed the deadline for claiming accident benefits against the truck driver’s insurance policy.
In order to decide whether Mr. Bunyan met the definition of an ‘insured person’ and was a defendant under the terms of his mother’s policy, the judge in the current case referred to the following criteria.
- An insured person is “any person specified in the policy as a driver of the insured automobile, the spouse of the named insured, and any dependent of the named insured or spouse” if any of these persons is involved in a motor vehicle accident in or outside Ontario.
- A dependant is defined as someone who is “principally dependant for financial support or care on the other person or the person’s spouse”. Further, dependency is assessed based on the amount and duration of dependency, as well as the needs (including financial needs) of the alleged dependent and their ability to be self-supporting.
Mr. Bunyan had been independent at times and was attempting to become self-supporting, but in the 12-month period before the accident, he didn’t earn enough to support himself in the two jobs he held. His mother and grandmother paid for more than half of his daily living expenses, particularly in the form of free accommodation and food. Further, Mr. Bunyan had not yet found a permanent place to live, nor had he obtained personal transportation, in the few weeks he had worked in Alberta. He also had no savings; had not paid outstanding child support obligations; and continued to rely on money from his mother for food. On all these grounds, the Court found that the claimant was still largely dependant on his mother when he was injured and is therefore an insured person under her vehicle insurance policy.
The Court also asserted that if the insurance company wished to take a position that Mr. Bunyan is not eligible for insurance benefits because he was not a dependant at the time of the pedestrian accident, the insurer should have done so while Mr. Bunyan was still eligible to pursue a SABS claim against the at fault driver’s insurance company, Manitoba Public Insurance Corporation (MPIC).
Under Ontario law, “the first insurer that receives a completed application for accident benefits is responsible for paying benefits to an insured person pending the resolution of any dispute as to which insurer is required to pay.” And, it is up to the involved insurance companies to resolve which insurance company is liable to pay benefits.
When the non-occupant of a vehicle is involved in a motor vehicle accident, such as a pedestrian accident or cycling accident, under Ontario’s Insurance Act, the non-occupant has two options for obtaining accident benefits:
- The injured person (non-occupant) may seek accident benefits from the vehicle insurer under which they are insured, or
- If recovery is unavailable under #1, the injured person may seek benefits from the insurer of the vehicle that struck the individual.
In the current case, the Court found that State Farm was obligated to pay Mr. Bunyan’s claim pending resolution of State Farm’s priority dispute with MPIC. And, Mr. Bunyan was not required or entitled to take a position on which insurer should pay.
The judge dismissed State Farm’s motion for an order to find Mr. Bunyan ineligible for accident benefits and ordered the insurance company to pay Mr. Bunyan’s partial indemnity costs.
If your insurance company is unfairly disputing your accident claim, get advice from a knowledgeable car accident claim lawyer at Stevenson Whelton MacDonald & Swan. Our team has substantial experience and expertise in resolving insurance disputes and we will ensure that your insurance company is held to its legal obligations.