Insurance Companies Must Act in Good Faith in the Accident Benefits Context

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  • When a person is injured in a motor vehicle accident in Ontario, they become entitled to receive accident benefits. Accident benefits are part of Ontario’s no fault car insurance scheme. Regardless of fault, an injured person will be entitled to receive accident benefits. The type of benefits and the amount of that an injured person may receive will depend on the severity of the injury or injuries sustained in the accident.

    Accident benefits cover a variety of expenses that an injured person may incur as a result of his or her injury. Medical and rehabilitation expenses are the most common and benefits can cover expenses such as physiotherapy, massage therapy, chiropractic treatment, assistive devices and occupational therapy. There are a number of other benefits that may be available to the injured person.

    A person must apply to the appropriate insurance company for accident benefits. Ordinarily, the insurance company that the injured person applies to is the insurance company that insures the injured person. However, that is not always the case, and the Insurance Act[1] has rules to determine which insurance company is responsible to pay accident benefits. In some cases, insurance companies have disputes between themselves as to which insurance company is liable to pay accident benefits, known as priority disputes. Ultimately, whichever insurance company pays for accident benefits, that insurance company owes a duty of good faith to the injured person. The duty of good faith requires an insurance company to act both promptly and fairly when investigating, assessing and attempting to resolve claims by injured people.

    In a recent decision[2] of the Licence Appeal Tribunal (“Tribunal”), the duty of good faith was central to the Tribunal’s analysis. The Tribunal found that where an insurance company is engaged in a priority dispute, it is not appropriate for the same lawyer to represent the insurance company in a priority dispute, and, at the same time, in a Tribunal proceeding involving the injured person. In the accident benefits context, the insurance company owes the injured person a duty of good faith arising out of its fiduciary obligations. However, in a priority dispute, the insurance company’s interest is to not pay the injured person benefits. That creates a conflict of interest.

    If you have been injured in a motor vehicle accident, an experienced personal injury lawyer can help make sure that you apply for and receive all appropriate accident benefits. It is equally important that your insurance company comply with its duty of good faith in assessing and responding to your claim.  Call the Jasmine Daya & Co. team at (416) 967-9100 or contact us online to schedule a free consultation.



    [1] Insurance Act, s 268(2).

    [2] 17-004636 v The Personal Insurance Company, 2018 CanLII 132225 (ON LAT).