*Since the writing of this blog the decision has been overturned, reversed by Court of Appeal in 2019.

When an individual is in a motor vehicle accident with an at-fault driver whose liability limits are too low to cover the damages and/or medical expenses, underinsured coverage insures the excess amount up to the policy limits.

Recently at issue at the Court of Appeal for Ontario was a truck driver’s personal insurance policy and whether it would step in to fill an underinsurance void for an incident which occurred on the job, in another country (Kahlon v ACE INA Insurance, 2018 ONCA 906 [Kahlon]).

In Kahlon, the Plaintiff’s corporation owned and leased a tractor to Bell City Transport, for which the Plaintiff operated it as an independent contractor under fleet insurance provided by ACE INA Insurance. The Plaintiff had his personal vehicle insured by Allstate Insurance Company of Canada. Both policies had OPCF Family Protection Coverage, which  provided underinsurance coverage.

While operating a tractor with a trailer in Florida, USA, the Plaintiff was struck by a Florida-based domestic vehicle. The Plaintiff suffered serious injuries including a traumatic brain injury. The insurance coverage on the Florida-based at fault vehicle was only $20,000 US, a deficient amount to cover the Plaintiff’s injuries and damages. In short, this was a situation of underinsurance.

Three motions were heard under Rule 21.01(1)(a) of the Rules of Civil Procedure, wherein the parties sought a decision as whether Allstate or ACE INA were required to provide underinsurance coverage to the Plaintiff under the OPCF 44R, per the respective policies. The motions judge determined that Allstate was obliged to respond to the underinsured coverage claim; ACE INA was not.

Allstate appealed and the Plaintiff cross-appealed seeking coverage under the ACE INA policy.

Allstate took the position that truck drivers do not have underinsured coverage under their personal policies for injuries they sustain as drivers of their trucks. This ultimately would extend further into drivers of other commercial vehicles , and persons related to such drivers. Should Allstate`s argument win the day, there are likely thousands of people that would be affected. The implications could be serious. However, should the Court not side with Allstate, this could result in other repercussions such as an increase in insurance premiums to motorists generally, where the cost of this underinsurance would need to be spread over a larger group.

The Court decided to adjourn the hearing, ruling that the issues were too important, and would have an impact on too large a cohort. The Court determined that it would allow the parties an opportunity to enlarge the record, which may include the input of experts, interveners and/or amici curiae to reach a just outcome in this case.   Stay tuned, as this one will be back before the Court for a more fulsome hearing in the coming months.

If you have a question about this decision or a similar file, please contact Eric Grossman at 416-777-5222