Ontario Court Caps Vehicular Accident Insurance Payout at $2.3M Aggregate

In a complex vehicular accident case in London, Ontario, the Ontario Superior Court of Justice ruled that the total insurance coverage available to 25 direct and derivative claimants is capped at an aggregate limit of $2.3 million. The case involves a vehicle driven by the first defendant, which failed to stop at a red light, resulting in the injury and death of several members of the London 120th Brownies.

The plaintiffs, including family members claiming under Ontario’s Family Law Act, made claims under automobile insurance policies that featured standard underinsured automobile coverage and family protection endorsements. The insurance coverage combined a $300,000 motor vehicle liability limit with a $2 million personal liability umbrella policy (PLUP) from Desjardins Insurance. The Court determined that the PLUP did not constitute a motor vehicle liability policy under relevant Ontario statutes and endorsements. The Court thus confirmed the $300,000 motor vehicle insurance limit and found the private defendants adequately insured only to that extent, classifying them as insufficiently insured motorists under the endorsement terms.

The Court further clarified that the amounts payable to claimants under family protection coverage are excess to any other recoveries plaintiffs obtain from multiple sources, including the PLUP. Consequently, the $2.3 million aggregate reflects the total compensation available to all claimants pro rata. The decision also ordered insurers to pay $10,000 in costs to the plaintiffs.

This ruling provides important clarification on the interpretation and interplay of excess liability policies, family protection endorsements, and insured limits within Ontario’s automobile insurance framework, with implications for handling insurance claims involving multiple plaintiffs and layered coverage from automobile and umbrella policies.