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Auto - Insurance - 'Insured Person'. Wais v. Coachman Insurance Company
In Wais v. Coachman Insurance Company (Ont Div Ct, 2025) the Ontario Divisional Court dismissed a LAT SABS appeal, here against a LAT finding that "the appellant was not a named insured, nor driving an insured vehicle, under any insurance policy in effect at the time of a motor vehicle accident pursuant to s. 3(1) of the Statutory Benefits Schedule ... (a)s a result, the Tribunal determined that the respondent insurance company was not required to assign the appellant a claim number pursuant to s. 32(3)4 of the SABS".
Here the court considered the ambitious appellant argument that (SS: I hope I've got this right ...) any MV insurance was obliged to provide SABS to anyone injured as a result of an MVA in Ontario, regardless of whether they were insured by that insurer or not:[4] The appellant requested that the Tribunal determine whether the appellant was an “insured person” pursuant to s. 3(1) of the SABS, and if the respondent was obligated to provide a claim number pursuant to s. 32(3)4 of the SABS.
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Appeal on Substantive “Error of Law” Grounds
[11] I find no legal error in the Tribunal’s decisions and would dismiss the appeal on substantive grounds. The appellant is asking this court to endorse a novel interpretation of the SABS that would lead to an unacceptable result where anyone involved in a motor vehicle accident in Ontario could apply to any auto insurance provider and, regardless of whether the person had motor vehicle insurance with, or any nexus to, that provider, the company would have to pay benefits under the SABS, subject to a subsequent priority dispute and determination. The Tribunal rejected such an interpretation and was correct in doing so.
[12] The appellant submits that, on a proper reading of the SABS, the appellant is, in fact, “insured” even though he is not insured by the respondent, or for that matter, any insurance provider. The appellant argues that anyone involved in an accident in Ontario has the SABS coverage because every motor vehicle insurance contract is required by legislation to provide the SABS benefits. Nevertheless, Section 6 of the Motor Vehicle Accident Claims Act, R.S.O. 1990, c. M.41, contemplates that an “insured person” involved in an accident may not have the SABS coverage under a contract issued by a private insurer so, in such circumstances, the Fund steps in as the payor of last resort. Section 268(2) of the Insurance Act outlines priority for liability to pay if an insured applies to the wrong insurer, in order to sort out which insurer is, in fact, liable to pay the SABS. On this argument, the appellant submits the Tribunal committed legal error by considering whether the respondent was liable to pay benefits to the appellant. Rather, he says, the Tribunal should have simply asked whether the appellant was “insured” under the SABS, and the question of the appropriate payor was a downstream question that only an arbitrator under the priority regulation, not the Tribunal, had the exclusive jurisdiction to answer.
[13] I find that the appellant is raising a question of law since he is arguing that the Tribunal misinterpreted the meaning of “insured person” or “insured automobile” under the SABS.
[14] Section 2(1) of the SABS states:2.(1) Except as otherwise provided, the benefits set out in this Regulation shall be provided under every contract evidenced by a motor vehicle liability policy in respect of accidents occurring on or after September 1, 2010. [15] Under section 3, the “Definitions and interpretation” section, of the SABS:“insured automobile” means, in respect of a particular motor vehicle liability policy, an automobile covered by the policy;
“insured person” means, in respect of a particular motor vehicle liability policy,
(a) the named insured, any person specified in the policy as a driver of the insured automobile and, if the named insured is an individual, the spouse of the named insured and a dependant of the named insured or of his or her spouse,
(i) if the named insured, specified driver, spouse or dependant is involved in an accident in or outside Ontario that involves the insured automobile or another automobile, or
(ii) if the named insured, specified driver, spouse or dependant is not involved in an accident but suffers psychological or mental injury as a result of an accident in or outside Ontario that results in a physical injury to his or her spouse, child, grandchild, parent, grandparent, brother, sister, dependant or spouse’s dependant,
(b) a person who is involved in an accident involving the insured automobile, if the accident occurs in Ontario, or
(c) a person who is an occupant of the insured automobile and who is a resident of Ontario or was a resident of Ontario at any time during the 60 days before the accident, if the accident occurs outside Ontario. [16] I agree with the Tribunal in its reconsideration decision that the words “a particular motor vehicle liability policy” in both the definition of “insured automobile” and “insured person” refer to the specific policy insuring the person or the vehicle, and not just any theoretical, potential, or generic motor vehicle liability policy. I agree with the Tribunal’s reasoning that the appellant has not provided any authority for the argument that a “particular” policy “means any indeterminate policy or is a reference to a ‘group’ of insureds that automatically get coverage from the Fund.”
[17] The consequences of adopting the appellant’s expansive interpretation of the SABS would be that every motor vehicle involved in an accident in Ontario would be an “insured automobile” and every occupant in such a vehicle would become an “insured person”, and entitled to the SABS benefits from any insurer in Ontario. In this scenario, the person could seek benefits from any insurance provider in Ontario who would be obliged at first instance to provide accident benefits, subject only to subsequent adjustment in a priority dispute with another insurer or the Fund.
[18] In oral argument, the appellant cited Zurich Insurance Co. v. Chubb Insurance Co. of Canada, 2014 ONCA 400, as supporting the proposition that a person involved in a motor vehicle accident in Ontario could have access to any Ontario motor vehicle insurer for the SABS benefits. In Zurich, the Supreme Court (2015 SCC 19) overturned the Ontario Court of Appeal’s majority decision and adopted as its own the dissenting reasons of Juriansz J.A.
[19] I cannot see how Zurich assists the appellant. Zurich was a “nexus” case concerning a debate about whether Chubb, which had provided optional accidental death and dismemberment (“AD&D”) insurance, was obliged to pay out a claim for benefits under the SABS. The Supreme Court agreed with Juriansz J.A.’s reasoning that Chubb, as the first insurance company to receive a completed application for benefits, was obliged to pay the SABS benefits while disputing coverage. The claimant in Zurich had motor vehicle insurance coverage either through Zurich or Chubb, hence there was a priority dispute. Zurich was not about persons being considered insured under the SABS despite having no coverage.
[20] The appellant’s final argument was that, since the Fund steps in as the payor of last resort, the appellant was, in effect, “insured” under the SABS, and the Tribunal’s Decisions to the contrary were wrong. Recourse to the Fund, however, is not automatic. The Tribunal held that the appellant had the onus and failed to prove that he had met the requirements of s. 268(2)1(iv) of the Insurance Act, namely that he had first exhausted his recourse against all other insurers. The appellant has not suggested any basis to interfere with this conclusion. It therefore cannot be said that the Fund would have insured the appellant, and the appellant’s argument based on the Fund as the appellant’s insurer fails.
[21] In sum, I find that the Tribunal was correct in determining that the appellant did not meet the definition of an “insured person” under the SABS. Consequently, the respondent was not required to provide a claim number and was not liable to pay an award. . Hesch v. Langford
In Hesch v. Langford (Ont CA, 2025) the Ontario Court of Appeal allowed an appeal, here where the sole issue was the "interpretation of s. 1.6(a)(ii) of the 44R ['OPCF 44R Family Protection Coverage' endorsement] by finding that [the victim] was not an “insured person”:[12] Section 1.6 of the 44R endorsement defines “insured person”. Subsection 1.6(a)(ii) is the material provision. It states, in its relevant part:1.6 “insured person” means
(a) the named insured and his or her spouse and any dependent relative of the name [sic] insured and his or her spouse, while
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(ii) an occupant of any other automobile except where the person leases the other automobile for a period in excess of 30 days or owns the other automobile, unless family protection coverage is in force in respect of the other automobile [13] The motion judge accepted that Ashley was Joe’s spouse and that s. 1.6(a)(ii) was the operative subsection because she was “an occupant of any other automobile” at the time of the accident, being a vehicle other than the vehicle that Joe had insured. This being so, Ashley would have been an insured person under Joe’s 44R, unless subject to a policy exclusion. However, the motion judge found based on what he concluded to be the clear language of s. 1.6(a)(ii), supported by the definition of “other automobile” in the OAP-1 and the decision in Kahlon v. ACE INA Insurance, 2019 ONCA 774, 148 O.R. (3d) 318, that “there are two [exclusions][1] to whether any specific ‘other automobile’ will qualify under this definition”, namely: (1) “except where the person leases the other automobile for a period in excess of 30 days or owns the other automobile”, and (2) “unless family protection coverage is in force in respect of the other automobile”. He found that Ashley was disentitled from coverage under Joe’s 44R by each of these two exclusions because she owned the automobile she was driving, and family protection coverage was in force in respect of her own automobile.
[14] With respect, I do not accept the motion judge’s conclusion that s. 1.6(a)(ii) creates two distinct exclusions to the coverage that would otherwise be available when a person listed in s. 1.6(a)(ii) is in an occupant of another vehicle. In my view, the sole exclusion to coverage that s. 1.6(a)(ii) creates operates where the occupant of the other automobile “leases the other automobile for a period in excess of 30 days or owns the other automobile”. However, that exclusion does not apply (and coverage is therefore provided) if “family protection coverage is in force in respect of the other automobile”.
[15] In a decision that, in fairness, was not brought to the motion judge’s attention, Parslow v. Old Republic Insurance Co. of Canada, 2002 CarswellOnt 5176 (Ont. S.C.), aff’d 2003 CarswellOnt 1958 (Ont. C.A.), this court has already affirmed the interpretation that I am advancing.
[16] Mr. Parslow was attempting to rely on a family protection coverage endorsement on his personal vehicle to recover excess damage caused to him by an underinsured driver when he, Mr. Parslow, was operating his work vehicle. However, the insurance policy for the work vehicle did not carry a family protection coverage endorsement. Mr. Parslow argued that s. 1.6(a)(ii) excludes coverage where an otherwise insured person is an occupant of another automobile that they own if family protection coverage is in force in respect of the other automobile. He submitted that since there was no family protection coverage on the work vehicle, he was not caught by that exclusion from coverage and could therefore rely on the family protection coverage endorsement on his personal vehicle. The judge who decided the motion in Parslow flatly rejected this interpretation of s. 1.6(a)(ii). Notably, he then went on to describe the correct interpretation of s. 1(6)(a)(ii) by explicitly accepting the submission made by State Farm, the insurance company that had issued the family protection endorsement on Mr. Parslow’s personal vehicle:A named insured is not insured under his first policy when he is an occupant of another automobile if he owns the other automobile and he does not have under insurance coverage on the other automobile. He is covered by his under insurance on the first policy if he also has under insurance coverage with the policy of insurance on the second automobile. [Emphasis added.] [17] This interpretation, of course, is contrary to the interpretation arrived at by the motion judge in this case and aligns with the interpretation I am advancing.
[18] Significantly, when this court rejected an appeal from the motion judge’s decision in Parslow it left no doubt that it affirmed not only the result he had arrived at, but also his reasoning. It said so explicitly: “We agree with the reasons of the motion judge and therefore dismiss the appeal”. That reasoning includes the motion judge’s interpretation of s. 1.6(a)(ii). It is arguable that this court’s decision in Parslow is binding as a matter of horizontal stare decisis and settles the issue now before us, given that this court explicitly adopted the reasoning of the lower court in Parslow on a matter essential to the resolution of the case, namely, the proper interpretation of s. 1.6(a)(ii). However, neither this case nor its precedential effect was argued before us, so I will not express a view on whether this decision governs the issue on appeal. At the very least, the decision is strongly persuasive and, as I will explain, I would not depart from it.
[19] Industry commentators interpreting s. 1.6(a)(ii) and its materially similar predecessor provisions also support the Parslow interpretation and not the interpretation the motion judge arrived at in this case: see, for example, John Newcombe, The Standard Automobile Policy Annotated (Toronto: Butterworths, 1986) at p. 195; H. Barry Starr, “Standard Endorsement Form 42 and the Standard Endorsement Form 44”, County of Carleton Law Association, Civil Litigation Updated 1984, November 23, 1984, at pp.14-15; Daniel Strigberger and Andrew Mercer, Auto Insurance Coverage Law in Ontario, 2nd ed. (Toronto: LexisNexis Canada, 2021) at p. 167.
[20] In my view, the motion judge failed to arrive at this conclusion because he misapplied the principles of interpretation. The governing principles for the interpretation of insurance policies were reaffirmed in Kahlon, at paras. 38-39:Where the language of the policy is unambiguous, the court gives effect to clear language, reading the contract as a whole. However, where the language is ambiguous, the court applies general rules of contract construction. The interpretation of the language should be consistent with the reasonable expectations of the parties, so long as the interpretation can be supported by the text of the policy. The court avoids interpretations that would give rise to an unrealistic result, or that would not have been in the contemplation of the parties when they entered into the insurance contract.
The rules of construction are to be applied in order to resolve ambiguity, not to create ambiguity where there is none. When the application of the rules of construction fails to resolve an actual ambiguity, courts will construe the policy contra proferentem – against the insurer. The corollary is that coverage provisions are interpreted broadly, and exclusion clauses narrowly. [21] In my view, contrary to the conclusion of the motion judge, the clear meaning of s. 1.6(a)(ii), when interpreted in context, unambiguously provides for a single coverage exclusion, not two distinct exclusions. That sole exclusion operates where the occupant of the other automobile “leases the other automobile for a period in excess of 30 days or owns the other automobile”, but that exclusion does not apply, and coverage is available, if “family protection coverage is in force in respect of the other automobile”. It is helpful to reproduce the provision again before explaining how the principles of interpretation of insurance policies impel this conclusion:1.6 “insured person” means
(a) the named insured and his or her spouse and any dependent relative of the name [sic] insured and his or her spouse, while
....
(ii) an occupant of any other automobile except where the person leases the other automobile for a period in excess of 30 days or owns the other automobile, unless family protection coverage is in force in respect of the other automobile [Emphasis added.] [22] According to the grammatical sequence of clause (ii), the term “unless” naturally qualifies the thing described in the clause that is immediately before it and cannot sensibly be read as qualifying the thing described two clauses before it. Put otherwise, the word “unless” introduces a qualification to the ownership exclusion to coverage, and not to the coverage itself. To achieve the interpretation the motion judge did, the word “unless” would have to be read as though it means “or unless”, which it does not say. If s. 1.6(a)(ii) was intended to contain two distinct coverage exclusions this could have been easily achieved by assigning each exclusion its own enumerated subclause or by adding a disjunctive term such as “or” between the two clauses. Instead, the drafters merged the clauses together separated only by a comma, used different terms in introducing each of the clauses (“except where”, and “unless”), and then situated the word “unless” immediately after a clearly identified exclusion. In my view, the only reasonable interpretation that emerges is the one I describe as the correct interpretation in paragraph 14, above. I am therefore persuaded that the motion judge’s interpretation is not supported by the clear meaning of s. 1(6)(a)(ii).
[23] In my view, the motion judge’s reliance on the context of the words used in the clause is also problematic. He concluded that his interpretation of s. 1.6(a)(ii) is supported by the contract as a whole, because of s. 2.2.3 in the OAP-1. Section 2.2.3 describes the coverage that spouses have under the OAP-1 when driving other automobiles, and it includes an exclusion in Special Condition 5 which states that: “For all coverages, except Accident Benefits, the other automobile cannot be an automobile that you or anyone living in your dwelling owns or regularly uses” (emphasis added). The motion judge reasoned that since this exclusion is “virtually identical to the first [exclusion] in s. 1.6(a)(ii)” it reinforces his interpretation of s. 1.6(a)(ii).
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[35] I am therefore persuaded that Ashley was an insured person under Joe’s 44R endorsement while operating her vehicle at the time of the accident, therefore the plaintiffs are eligible claimants against that policy. I would find that the motion judge erred in holding otherwise. . Kellerman-Bernard v. Unica Insurance Company
In Kellerman-Bernard v. Unica Insurance Company (Div Court, 2023) the Divisional Court considered an interesting SABS appeal where the insured, whose son was injured in a bicycle accident, herself applied for 'catastrophic impairment' SABS coverage on the basis of emotional and psychological injuries. She was denied coverage both at the LAT appeal and a further LAT reconsideration on grounds that she was not categorically-eligible, but reversed at the Divisional Court on a statutory interpretation argument.
In these quotes the court considers the statutory definition of 'insured person':[4] For the reasons that follow I would allow the appeal. In summary, the interpretation adopted by the LAT ignores the plain and ordinary meaning of the legislation in question, focuses on one phrase in that legislation without considering the phrase in its full context and defeats rather than promotes the accepted purpose of the SABS.
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[5] This appeal involves the interplay between three provisions in the SABS- s. 3 (1), which defines who is an “insured person”; s. 45(1), which provides that an “insured person” is entitled to apply for a catastrophic impairment designation and s. 3(2) which sets out the criteria necessary to qualify for such a designation. The full text of these provisions is set out below.
Section 3(1)
[6] The relevant portions of section 3(1) provide as follows:“insured person” means, in respect of a particular motor vehicle liability policy,
(a) The named insured, any person specified in the policy as a driver of the insured automobile and, if the named insured is an individual, the spouse of a named insured or of his or her spouse.
(i) If the named insured, specified driver, spouse or dependant is involved in an accident in or outside Ontario that involves the insured automobile or another automobile, or
(ii) If the named insured, specified driver, spouse or dependant is not involved in an accident but suffers psychological or mental injury as a result of an accident in or outside Ontario that results in physical injury to his or her spouse, child, grandchild, parent, grandparent, brother, sister, dependant or spouse’s dependant [7] Section 3(1) sets out two classes of people who are named in the policy who qualify as “insured persons” – named insureds who are actually involved in the accident and named insureds who are not actually involved in the accident, but who suffer psychological or mental injury as a result of the fact that their family member was involved in the accident. The Appellant falls within the second class of “insured persons”. She is named in the policy. She was not directly involved in the accident, but she suffered psychological or mental injury as a result of the fact that her son was directly involved in the accident.
[8] In Ayr Farmers Mutual Insurance Company v. Wright, 2016 ONCA 789 at para. 25, the Court of Appeal states:It is well established that the definition of insured person in the [SABS] governs the entitlement to SABS. [9] As previously noted, it is not contested that the Appellant is an “insured person”.
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