Does Ontario Auto Insurance Cover Dependent Relatives?

Aug 20, 2019 | Car Accidents, Initial Consultation

Moussa Sabzehghabaei

Personal Injury Lawyer

The vehicle insurance industry is changing, offering customers more choices over the policies they choose and the specific premiums they pay. Effective from June 1st, 2016, the Ontario government made some amendments to the vehicle insurance offers. These amendments were geared towards providing consumers with the flexibility they need to choose their preferred policies and the premiums they pay. The primary question is, “does Ontario auto insurance cover dependent relatives?”

Common Injuries in a Pedestrian Accident
Most people in Ontario depend on one or more of their family members’ vehicle insurance to cover them in case a car crash occurs. According to the Statutory Accident Benefits Rules, the term ‘insured entity’ includes all the “dependants of the mentioned person in the insurance paperwork or of his or her spouse.” Note that the dependants don’t need to be kids (minors). It can be any individual who is principally “dependent for care or financial support” on the insured or his or her partner.

Generally, establishing who is and who isn’t a dependent for auto insurance purposes is very tricky. For instance, the Ontario Superior Court of Justice recently made a decision regarding this case: two ladies were severely injured in a road accident involving a van on their way to Niagara Falls. During that period, the two women were living with their relatives. The question was, “Are these ladies dependents of the relatives they lived with? If yes, which specific relative?”

To help you understand the case better, let’s refer the first victim as a mother. She has five adult kids, including a grown son and daughter. Now, the mother’s sister-in-law (the aunt) is married to the mother’s brother.

Both the aunt and the mother lived with the mother’s daughter and her family between September 2010 and December the same year. Unfortunately, the daughter divorced, and both the mother and aunt shifted to the son’s place, and several weeks after, the Niagara Falls crash happened. As of that time, the aunt and the mother were living in the son’s home.

MVACF or the son’s vehicle insurance: who should pay?

Let’s get a few things clear: the vehicle driven by the daughter’s husband wasn’t insured. Both the mother and aunt had no vehicle insurance of their own because they never owned a vehicle or acquired a driving license while in Canada. In this case, there were only two sources of benefits that could cover the women’s injuries caused by the van crash. First source is the MVACF (Ontario Motor Vehicle Accident Claims Fund) and the second source is the son’s vehicle insurance cover.

Both the aunt and mother sought compensation under the son’s auto insurance policy, claiming that they were his dependants in accordance with the Ontario law. The son’s insurer offered statutory benefits. However, the company sought reimbursement from the Minister of Finance as they contested the women’s status as dependents of the insured.

This case was first submitted to arbitration. It was ruled out that the two ladies were not the son’s dependants. Therefore, the MVACF was to be held responsible for the victim’s statutory accident benefits.

The appeal

The Minister of Finance appealed the arbitrator’s ruling to the Ontario Superior Court. On 6th July 2018, Justice Andrew A. Sanfilippo ruled in favor of the Ministry. He argued that the aunt was a dependent of the insured but the mother wasn’t. Based on the Ontario law, a dependant is an individual who ‘primarily depends on the insured for care or financial support.’

Note that the arbitrator ruled that the aunt and mother were not the insured’s dependents in terms of both care and financial support. The Ministry didn’t appeal based on the care aspect. Thus, the primary question before Justice Andrew was whether or not either of the victims were financially dependent on the insured.

As mentioned earlier, the judge ruled in favor of the finance minister. He explained that the arbitrator should have followed two important steps. First, he or she should have analysed the plaintiffs’ financial and other relevant needs to establish whether they can support themselves or must depend on someone financially. Secondly, if the two ladies were dependent on the son, the arbitration should have determined if there existed a principal dependency relationship at the time the accident happened.

The primary point of contention was the acceptable ‘period’ necessary to determine the insured’s financial relationship with the victims of the van accident. The judge held that the arbitrator had applied ‘too long’ a period and this had a significant effect on the overall analysis of the aunt’s status.

The timeframe for ‘principal dependency’

The arbitrator analysed the status of the aunt over a period of six months before the crash. She lived with the insured half of that period and the other three months with the daughter. Based on these details, the aunt was not principally dependent on the insured – the son.

However, Justice Sanfilippo asserted this was a mistake because the arbitrator should have considered a shorter period before the crash. During that period, the aunt lived with the insured exclusively and depended on him financially because she didn’t have her own income. The insurance company tried to argue that the aunt wasn’t living with the insured permanently and could have gone back to the daughter’s home if she reconciled with her husband. Besides, the trip was meant to facilitate reconciliation between the daughter and her husband. But the court saw limited relevance on these details.

The bottom line is, what matters is the nature of the dependency relationship during the time of the accident. On that fateful day, the aunt was depending on the insured financially and the daughter didn’t have a support plan for the aunt. On the other hand, the mother had a source of income at the time of the crash because she was receiving a monthly benefit of $1,150 offered by the Ontario Disability Support Program.

Note that auto insurance disputes particularly those involving dependants can give rise to complicated legal and issues. It is highly recommend that you retain experienced attorney on your side to pursue your claim and help you navigate through the legal process.