Insurance News - Monday July 14, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Monday, July 14, 2014:

• Why Ontario pay the highest car insurance rates in Canada - crowded roads, fraud, private delivery, take your pick.
• An alarming proportion of Ontario teenagers admit that they have texted while behind the wheel of a vehicle, says a survey of Grade 7 to 12 students in the province conducted for the Centre for Addiction and Mental Health.
• Editorial: Steps should be taken to curb dangerous texting by teen drivers.
• Premier Wynne says Ontario will bring back bill to toughen penalties for distracted driving.
• Will insurance companies be the greatest contributors to the success of self-driving cars?
• The tipping point for telematics is going from an installed device in the insured's vehicle to a downloaded app on their phone.

US District Court holds uninsured motorist coverage proceeds go to relatives of decedent insured, not estate

Michael Furlong was driving a pick-up truck southbound onto the Sagamore Bridge.  He swerved across the center line to avoid hitting  a vehicle that was merging.  He crashed into a minivan driven by Amnon Bogomolski.  Both men died as a result of the accident. 


Furlong's auto policy included $100,000 in uninsured motorist coverage.  Commerce had tendered the limits of the policy to settle Furlong's wrongful death claim against the unknown driver of the vehicle that was merging. 


Bogomolski's estate filed a wrongful death suit against Furlong's estate, and moved for what it called an attachment or to reach and apply the proceeds of the uninsured motorist insurance policy.  (The court noted that a motion for attachment or to reach an apply was technically premature until there was a judgment.  It treated the action one for preliminary injunction to restrain Commerce or the administrator of Furlong's estate from disposing of the property pending the outcome of the action.) 


The issue before the United States District Court in Bogomolsky v. Furlong, 2014 WL 29452927 (D. Mass. 2014) was whether the proceeds of the Commerce uninsured motorist policy were the property of Furlong's estate or of his daughter as his closest relative.  If the former, then the plaintiff could reach and apply the proceeds; otherwise, it could not. 


The court noted that under the Massachusetts Wrongful Death statute, the money recovered in a wrongful death claim is not a general asset of the estate, but constitutes a statutory trust fund held by the administrator of the estate as trustee for distribution to the statutory beneficiaries.   (In other words, under the wrongful death statute close relatives of the decedent can recover damages even if they are not included in the decedent's will and even if the decedent's debts exceed his assets.) 


Similarly, proceeds from a claim for ininsured or underinsured motorist insurance operates flow to the presumptive takers (i.e., the close relatives listed in the wrongful death statute), not to the estate.


The court held that Furlong's daughter, not his estate, was entitled to the proceeds of the uninsured motorist policy.  Therefore Bogomolski's estate could not reach and apply those proceeds. 

Limitation to Add Defendants Expired

Issues relating to discoverability can be decided on a motion to amend a claim.

In Garic v. Mack Trucks Canada 2014 ONSC 3103 (S.C.J.), the plaintiff was injured in 2006 while operating a dump truck owned by her husband.  One of the axles gave way, causing her to lose control and roll into a ditch.  Her husband was initially named as an FLA claimant.

In 2012, the plaintiff brought a motion seeking to add her (now former) husband and his company as defendants for failing to maintain the vehicle.  She argued the claim was not discoverable until the named defendants gave evidence on discovery that the owner had not followed proper maintenance procedures. 

The Court dismissed the motion to add defendants, holding that:

[19]           The difficulty with the plaintiff's position is that the case law has established that to discover a claim the plaintiff must only have sufficient facts upon which to support an allegation that there is a cause of action, and it is not necessary for the plaintiff to have discovered complete evidentiary support to make the claim winnable (see Wilkinson v Braithwaite [2011] O.J. No. 1714 (S.C.J.) at para. 32).

The Statement of Claim alleged the named defendants were responsible for "service, inspection and maintenance" of the truck, which was expressly denied in the Statement of Defence.  The plaintiff knew her husband was responsible for maintenance of the truck since the business commenced.  Justice Broad held that the essential facts were either actually known to the plaintiff or at least obtainable with due diligence more than two years since the motion was brought.

Insurance News - Thursday, July 3, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Thursday, July 3, 2014:

• Finance Minister Charles Sousa says Ontario Liberal government is still committed to lowering auto insurance rates by 15% by August 2015.
• Google and Detroit on a collision course regarding self-driving cars and car ownership. The auto makers are focused on accident avoidance systems while Google is talking about moving from an ownership model to a service model.
• Should the blind, drunk and elderly be allowed to operate driverless cars? The road rules may need to change.
• According to a recent survey of women in the insurance industry. leadership roles in the industry still lack gender diversity.
• Carfax has expanded Damage Reports for Canada auto dealers.

Insurance News - Wednesday, July 2, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Wednesday, July 2, 2014:

• Car-sharing companies and insurers are in a state-by-state battle over their business model.
• How Google might put taxi drivers out of business.
• Meet Ray, the self-driving forklift that is parking cars at a German airport.
• The OPP suggesting distracted driving could be the cause of over 50% of accident (I think there is under-reporting).
• A great article about seniors driving. The numbers are growing despite declining physical abilities.

The Limitation Period to Commence a Claim under OPCF-44R

The decision in Schmitz(Litigation guardian of) v. Lombard General Insurance Co. of Canada, 2014 ONCA 88 (C.A.) is an important decision on when the limitation period begins to run in a claim under form OPCF-44R, for underinsured motorist coverage.

This matter concerned a motor vehicle accident that occurred on July 19, 2006. The plaintiff had a policy of insurance which included a provision for underinsured motorist coverage. The plaintiff commenced a claim against the defendant driver in June 2007 and a claim against his insurer for underinsured motorist coverage in June 2010. The plaintiff’s insurer brought a motion to dismiss the plaintiff’s claim on the basis that it was commenced after the expiry of the 1 year limitation period set out in section 17 of the OPCF-44R. The plaintiff took the position that section 17 did not apply and the 2 year limitation period set out in section 4 the Limitations Act overrode section 17 of the OPCF-44R. The motions judge accepted the plaintiff’s argument and dismissed the insurer’s motion. The plaintiff’s insurer appealed this decision.

 On appeal, the plaintiff’s insurer conceded that the 2 year limitation period in the Limitations Act applied and overrode the 1 year limitation period in the OPCF-44R. Instead, the insurer asserted that the limitation period began to run when the plaintiff knew or ought to have known that their claim exceeded the Defendant’s policy limits, embodied under section 15 of the OPCF-44R. The insurer argued that this section was not overridden by the discoverability provision under section 5 of the Limitations Act.

 
The Ontario Court of Appeal rejected the insurer’s argument. The court concluded that once it was accepted that the 2 year limitation period set out in the Limitations Act applied so did the discoverability provisions in section 17 of the Act. Turning to discoverability, the court held that this loss was only discovered by the plaintiff after a formal request for indemnification was made to the insurer and the insurer failed to indemnify the plaintiff. Given this finding, the court held that the 2 year limitation period did not begin to run until the day after the demand for indemnification was made to the plaintiff’s insurer under the underinsured motorist provision of the policy.

Ontario Auto Insurance Reforms

It appears Ontario's never ending auto insurance reforms are gearing up again.  I thought it would be fun to look at a Monty Python sketch on insurance.

Happy Canada Day!