Gap In Ontario Insurance Law Hurts Orphans, and Others

Kudos to Ottawa Citizen writer Joanne Chianello for her excellent article about the gap in Ontario auto insurance that robs deserving accident victims of insurance coverage because of criminal acts by the driver who caused the accident. Read it here:

Ontario Insurance Law Gap Article

In the article, Ms. Chianello describes how three little girls orphaned when their parents were killed in a motor vehicle accident may be stuck with insurance limits of only $200,000 when the at fault driver’s liability insurance limits were $1 Million.  That would be a stomach-turning result, but a result that is very common.

When an at fault driver violates his or her  insurance policy by committing certain crimes, the standard Ontario insurance policy permits the insurance company to limit their insurance coverage to the legal minimum of $200,000, regardless of the amount of insurance the driver purchased.  The results can be very unfair to someone who is seriously injured or who, like the three Regnier girls, suffer a major loss like the loss of two parents.

The same result may occur when someone has a G1 or G2 license and causes an accident while doing something that violates the insurance policy.  For example, I have a client who was catastrophically injured as a passenger when the G2-licensed driver smashed into a building.  In that case, the insurance company has similarly asserted a policy violation and is indicating that they will only pay $200,000 toward my client’s injuries if the at fault driver is convicted of the crimes he is said to have committed.

This happens because of the way Ontario’s insurance law is drafted.  There will only be change if people advocate for change.  With an election this fall, it is an excellent opportunity to tell MPPs and MPP wanna-be’s how you feel when  they knock at your door.

Is there anything you can do to protect your family from a tragedy like this?  The short answer is yes.

First, make sure you have proper life insurance and disability insurance outside of the auto insurance regime.

Second, if you have car insurance, make sure you ask your insurance agent or broker for the Family Protection Endorsement.  This is a cheap add-on to your policy that means that your own insurance policy limits will kick in if there is a problem with the insurance from the at-fault driver.  This add-on is also very important if you travel in the U.S. where in many states drivers do not need to carry very much liability insurance.