Strigberger Legal

Loss Transfer and Priority Disputes

 

Loss transfer and priority disputes

What is Loss Transfer? Picture what might happen when a chihuahua collides with an Old English Mastiff■ 

Loss transfer is a statutory mechanism in Ontario’s auto insurance system that enables the transfer of financial responsibility from one insurer to another following a motor vehicle accident. It allows the insurer responsible for paying statutory accident benefits to its insured to recover amounts paid from the insurer of specified types of automobiles in certain circumstances. This process helps distribute financial burdens among insurers, especially when accidents involve vehicles like heavy trucks or motorcycles, which can lead to higher claims costs due to their characteristics.

In very (very) general terms, loss transfer is triggered when there is an accident between:

  • A motorcycle/snowmobile and a car
  • A motorcycle/snowmobile and a truck
  • A car and a “heavy commercial vehicle”

The insurer paying statutory accident benefits to a claimant under a policy insuring one of these “smaller” vehicles is entitled to claim loss transfer indemnification from the insurer of the larger vehicle involved in the accident that led to the claimant’s application for benefits.

But the amount of loss transfer indemnification is based on the degree of fault of each insurer’s insured. For example, if the motorcyclist was 50% at fault and the car driver was 50% at fault in the accident, the motorcyclist’s insurer is entitled to only 50% loss transfer indemnification from the car’s insurer. Fault for the accident is determined under the fault determination rules.

We act for insurers pursuing loss transfer and insurers being pursued for loss transfer. Our loss transfer services include:

  • Assessments as to whether loss transfer applies.
  • Investigation and examinations under oath.
  • Fault assessments.
  • Indemnification/reimbursement assessments.
  • Limitation period assessments.
  • Out of province accidents/insurers.
  • Arbitrations and appeals.

Do you have a loss transfer issue? Let’s get in touch.

What is a Priority Dispute? It’s one of those times when we are very proud to be #2■ 

Anyone injured in a motor vehicle accident in Ontario is entitled to claim accident benefits an insurer. The legislature has created a pecking order that determines which insurer has “priority”:

  1. The claimant first has recourse against their own insurer.
  2. If they don’t have one, they next have recourse against the insurer of the vehicle they were in, or in the case of a non-occupant, the insurer of the vehicle that struck them.
  3. If there is still no insurance available (for example, the vehicle was uninsured), the claimant next has recourse against the insurer of any other vehicle involved in the accident.
  4. If there is still no insurance available, the claimant finally has recourse against the Motor Vehicle Accident Claims Fund.

 

Under most non-auto insurance policies, where an insurer receives an application or claim under a policy from someone they don’t cover, the insurer can simply deny coverage and refuse to pay anything under the claim. There is no legal obligation for an insurer to indemnify a claimant under a policy if the person isn’t covered under the policy. If the person wishes to dispute coverage, they must issue an action against the insurer.

However, Ontario’s auto insurance scheme and, more specifically, the accident benefits regime is all about consumer protection. In the accident benefits world, this means making sure that injured claimants get the benefits they are entitled to receive as quickly and efficiently as possible.

To meet this objective, the Legislature created a relatively short Regulation under the Insurance Act, named Disputes Between Insurers, O.Reg. 283/95. As the title suggests, where an insurer wishes to dispute its responsibility to pay benefits on the basis that another insurer is responsible to pay them, the insurer must follow the provisions of the Regulation: It cannot deny the claim and tell the claimant to “go away”.

We act for insurers pursuing priority disputes and insurers being pursued for priority. Our priority dispute services include:

  • 90-day priority dispute investigations and examinations under oath.
  • Legal opinions on substantive priority dispute issues including, named insured, spouse, financial and care dependency, listed drivers, regular use, policy terminations, removal of road coverage, out of province claims and claimants.
  • Legal opinions on OReg 283/95, including deflection, late priority dispute notices, initiation of arbitration within one-year of priority dispute, section 10 notices.
  • Arbitrations and appeals.

Do you have a priority dispute issue? Let’s get in touch.

We don't just dabble in this stuff...

Loss transfer and priority dispute decisions involving Daniel Strigberger

Loss Transfer Cases

  • Aviva  v Echelon (2024), Superior Court (Loss Transfer Appeal – Does loss transfer apply against a licensed Ontario insurance company when the accident happens outside Ontario and the loss transfer claim is against a policy issued outside Ontario?)
  • Echelon v Aviva (2024), Private Arbitration (Loss Transfer – Does loss transfer apply against a licensed Ontario insurance company when the accident happens outside Ontario and the loss transfer claim is against a policy issued outside Ontario?)
  • Chubb v Coseco (2022), Private Arbitration (Loss Transfer – Does loss transfer apply in a claim involving the “other automobile” provisions of the OAP 1 and optional benefits?)
  • Echelon v Allstate (2018), Private Arbitration (Loss Transfer – Interplay between loss transfer rights and “other automobile” provisions in the automobile policy)
  • State Farm v Belair (2017), Superior Court (Loss Transfer Appeal – Fault – When does Rule 13 apply at an intersection?)
  • State Farm v Economical (2017), Private Arbitration (Loss Transfer – Fault – Rules 12 and 14 of fault determination rules)
  • State Farm v Aviva (2015), Court of Appeal (Loss Transfer Appeal – Fault – What does “ordinary use of law” mean under section 5 of the fault determination rules?)
  • State Farm v Old Republic (2015), Court of Appeal (Loss Transfer Appeal – Fault – Does Rule 9 apply to allocate fault between automobile A and automobile C?)
  • State Farm v Allstate (2015), Private Arbitration (Loss Transfer – Fault – Meaning of “adjacent lanes”)
  • State Farm v Royal&Sunalliance (2014), Private Arbitration (Loss Transfer – Meaning of “backing up” under Rule 19 of the fault determination rules)
  • State Farm v Old Republic (2014), Superior Court (Loss Transfer Appeal – Fault – Does Rule 9 apply to allocate fault between automobile A and automobile C?)
  • Farmers Mutual v State Farm (2013), Superior Court (Loss Transfer Appeal – Fault – Application of Rule 7)
  • State Farm v Axa (2013), Private Arbitration (Loss Transfer – Whether the second party insurer’s decision to treat its Quebec policy as void ab initio relieved it of its loss transfer obligations in Ontario)
  • Economical v Royal&Sunalliance (2013), Private Arbitration (Loss Transfer – Fault in pedestrian accident)
  • Federation v Kingsway (2012), Court of Appeal (Loss Transfer Appeal – When does the loss transfer limitation period to initiate arbitration start?)
  • Federation v Kingsway (2011), Superior Court (Loss Transfer Appeal – When does the loss transfer limitation period to initiate arbitration start?)
  • Primmum v Allstate (2010), Superior Court (Loss Transfer Appeal – Does loss transfer apply against a licensed Ontario insurance company when the accident happens outside Ontario and the loss transfer claim is against a policy issued outside Ontario?)
  • Jevco v Economical (2009), Private Arbitration (Loss Transfer – loss transfer priority as between the insurer of the driver and the insurer of the rental vehicle)
  • CAA v American Home (2007), Private Arbitration (Loss Transfer – Does loss transfer apply against a licensed Ontario insurance company when the accident happens outside Ontario and the loss transfer claim is against a policy issued outside Ontario?)

Priority Dispute Cases

  • Dufferin Mutual v Edge Mutual (2024), Private Arbitration (Priority Dispute – Financial dependency)
  • Co-operators v Chubb (2024), Private Arbitration (Priority Dispute – Financial and care dependency)
  • Optimum v Economical et al (2024), Private Arbitration (Priority Dispute – Policy termination).
  • Echelon v Gore (2023), Private Arbitration (Priority Dispute – Optional benefits)
  • Dufferin Mutual v Aviva (2021), Private Arbitration (Priority Dispute – Are adjusting fees recoverable in a priority dispute?)
  • Co-operators v Intact (2020), Private Arbitration (Priority Dispute – What happens when an insured asks the insurer to remove road coverage from the policy before an accident)?
  • Travelers v CAA (2020), Court of Appeal (Priority Dispute Appeal – Does Ontario’s priority dispute scheme apply against a licensed Ontario insurer under an auto policy written and sold in another province, when the accident happens in the other province?)
  • Pembridge v Sovereign (2019), Superior Court (Priority Dispute Appeal – Once an insurer ‘accepts priority, can they subsequently retract their acceptance?)
  • Coseco v Liberty Mutual and GMAC (2019), Superior Court (Priority Dispute Appeal – Does Ontario’s priority dispute scheme apply to an out of province insurer (Canadian or American) if their insured is involved in an accident in Ontario?)
  • Co-operators v ICBC (2019), Private Arbitration (Priority Dispute – Financial dependency)
  • Co-operators v Ace INA (2019), Private Arbitration (Priority Dispute – Financial dependency)
  • Co-operators v Intact (2019), Private Arbitration (Priority Dispute – Financial dependency)
  • Coseco v Liberty Mutual and GMAC (2019), Private Arbitration (Priority Dispute – Does Ontario’s priority dispute scheme apply to an out of province insurer (Canadian or American) if their insured is involved in an accident in Ontario?)
  • Northbridge v Intact and Co-operators (2018), Superior Court (Priority Dispute Appeal – What is an “occupant”?; Can Insurer A pursue Insurer C for priority by relying on Insurer B’s priority dispute notice to Insurer C?)
  • Pembridge v Sovereign (2018), Private Arbitration (Priority Dispute Appeal – Once an insurer ‘accepts priority, can they subsequently retract their acceptance?)
  • Travelers v CAA (2018), Superior Court (Priority Dispute Appeal – Does Ontario’s priority dispute scheme apply against a licensed Ontario insurer under an auto policy written and sold in another province, when the accident happens in the other province?)
  • Wawanesa v Northbridge and Allstate (2018), Private Arbitration (Priority Dispute – When a claimant has sole discretion to choose their insurer, when does their election happen?)
  • Unica v Wawanesa (2018), Private Arbitration (Priority Dispute – Financial dependency)
  • TD Insurance v Dominion (2018), Superior Court (Priority Dispute Appeal – Regular use) 
  • Dominion v State Farm (2018), Court of Appeal (Priority Dispute Appeal – Is an ‘excluded driver’ the same as a ‘listed driver’ under the definition of “insured person”?)
  • Co-operators v Intact and Northbridge (2018), Private Arbitration (Priority Dispute – “Occupant”, regular use, stacked priority dispute notices)
  • Economical v Echelon (2017), Private Arbitration (Priority Dispute – Reimbursement issues)
  • Travelers v CAA (2017), Superior Court (Priority Dispute Appeal – Preliminary issue dealing with arbitration agreement and leave to appeal issues)
  • TD Insurance v Travelers (2017), Private Arbitration (Priority Dispute – Regular use)
  • Allstate v Gore and MVACF (2017), Private Arbitration (Priority Dispute – Meaning of “involved in the incident”)
  • Dominion v State Farm (2016), Superior Court (Priority Dispute Appeal – Is an ‘excluded driver’ the same as a ‘listed driver’ under the definition of “insured person”?)
  • Economical v State Farm (2015), Court of Appeal (Priority Dispute Appeal – Whether the insured’s vehicle had “road coverage” on it at the time of the accident)
  • Co-operators v Allstate (2015), Private Arbitration (Priority Dispute)
  • Intact v Co-operators (2014), Private Arbitration (Priority Dispute – Financial dependency)
  • Intact v Co-operators (2014), Private Arbitration (Priority Dispute – Regular Use)
  • Economical v State Farm (2014), Court of Appeal (Priority Dispute Appeal – Whether the insured’s vehicle had “road coverage” on it at the time of the accident)
  • Co-operators v Ontario (2014), Superior Court (Priority Dispute Appeal – When must the insurer paying benefits give another insurer, instead of the Motor Vehicle Accident Claims Fund, a priority dispute notice?)
  • Waterloo Insurance v The Personal (2014), Private Arbitration (Priority Dispute – Financial dependency)
  • Dominion v Her Majesty (MVACF) (2013), Superior Court (Priority Dispute Appeal – Financial dependency)
  • State Farm v Economical (2013), Private Arbitration (Priority Dispute – Deflection and fraudulent policy)
  • State Farm v Co-operators (2013), Private Arbitration (Priority Dispute – Whether there are any saving provisions available for missing 1-year limitation period under s7 of OReg 283/95)
  • Economical v Royal&Sunalliance (2013), Private Arbitration (Priority Dispute – Policy termination)
  • Economical v York Fire (2013), Private Arbitration (Priority Dispute – Care dependency)
  • Economical v Her Majesty (2013), Private Arbitration (Priority Dispute – When must the insurer paying benefits give another insurer, instead of the Motor Vehicle Accident Claims Fund, a priority dispute notice?)
  • Economical v Lombard (2012), Private Arbitration (Priority Dispute – Late notice under section 3 of OReg 283/95)
  • Economical v Nordic (2012), Private Arbitration (Priority Dispute – When does the 1-year limitation period to initiate arbitration start?)
  • Dominion v Federated (2012), Private Arbitration (Priority Dispute – Regular use)
  • ING v Economical (2010), Private Arbitration (Priority Dispute – Financial dependency and child support)
  • Valauskas v Motor Vehicle Accident Claims Fund (2009), FSCO Appeal (Nexus)
  • Unifund v Danilov (2009), FSCO Arbitration (Nexus)
  • Ace INA v Co-operators (2009), Superior Court (Priority Dispute Appeal – Regular use)
  • Dominion v Pafco (2008), Private Arbitration (Priority Dispute – Spouse)

Loss Transfer and Priority Dispute Blog

Loss Transfer: New Fone Who Dis?

by | Jan 10, 2025 |

Ontario’s auto insurance system is complex, aiming for fairness in compensating accident victims. A key part of this system is the loss transfer scheme. This blog explains the scheme’s purpose, how it works, and its effects on insurers (and policyholders).

Priority Disputes 101: Help!

by | Jan 1, 2025 |

It’s a Friday afternoon before a long weekend, of course, and you’ve just received a potential SABS priority dispute. A new Application for Accident Benefits arrives on your desk and the claimant alleges that she was in your insured’s vehicle at the time of the...

Priority Disputes 101: Notice in 90

by | Jan 1, 2025 |

Years ago, I had a file where my client received a priority dispute notice. It was for a catastrophic accident benefits claim involving a 26-year-old who had suffered severe brain injuries. There was little doubt that my client had priority over this claim because he...

Priority Disputes 101: The Claimant

by | Jan 1, 2025 |

In SABS Priority Disputes 101: Help!, and SABS Priority Disputes 101: Reflection on Deflection, I discussed that the purpose of Ontario's priority dispute scheme is to ensure an injured claimant receives timely benefits despite any priority disputes between insurers....

SCC finds nexus in Zurich v. Chubb

by | Dec 21, 2024 |

This article was initially posted in April 2015. The Supreme Court of Canada has reversed the Ontario Court of Appeal's decision in Zurich v. Chubb.  The claimant was driving a Ford Windstar that she had rented from Wheels4Rent, a car rental agency.  On September 23,...

Priority Insurer Has No Options

by | Dec 9, 2024 |

NOTE: This article was previously posted in July 2019. The decision was overturned in Continental Casualty Company v. Chubb Insurance Company of Canada, 2022 ONCA 188 (CanLII) Can the insurer, who is required to waive reliance on the priority dispute rules and pay...

Loss transfer limitation rolls along

by | Sep 12, 2014 |

The Superior Court has upheld an arbitrator's decision, finding that loss transfer is subject to a two-year rolling limitation period. In Economical v. Zurich, the claimant was driving a car and was involved in a motor vehicle accident with a dump truck. She applied...