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Car Keys and Car Insurance Coverage in Ontario

When you think of a car accident case, the basic premise is that there was an accident; an at fault party; and the at fault party is responsible to pay for the injured party’s damages and losses.

Some cases certainly work that way. But the vast majority of cases do not.

There are a lot of moving parts behind the scenes which non-lawyers rarely see; but which lawyers see all too often.

These moving parts have to deal with insurance coverage. Insurance coverage will result in the defendant’s ability to pay for a Plaintiff’s damages and losses.

You see, it’s not enough for a Defendant to be found responsible for pay for the damages and losses in a personal injury lawsuit.

Just because a Defendant is deemed responsible, does not translate into a Defendant’s ability to pay for those losses. This is a very important distinction.

Take the example of a Defendant who has no assets to his/her name, and who is in tremendous debt. How would that individual Defendant have the ability to pay out of a Judgment awarded against him/her? It wouldn’t be possible unless that Defendant was put on some sort of payment plan which s/he would never be able to fulfill. In Canada, simply because you don’t pay a debt does not mean that you go to jail. Nor does it mean that you have to give up all of your worldly belongings.

And it’s for these very reasons that the topic of insurance coverage is so important in a personal injury case. Coverage will determine whether or not there are real assets there for a Plaintiff to recover upon. It will also determine who is responsible to pay for what.

After (and even before) a lawsuit has been commenced, insurers will play a real life game of hot potato when it comes to coverage. They will try to pass the buck along to another party, and by nature along to another insurer. In some cases, the same insurer will pass the buck to a different party who also happens to be insured by the very same insurer; only a different branch or under a different policy!

Few people think of these sort of things when they think about a personal injury lawsuit. Even when they are involved in personal injury lawsuits, parties (especially plaintiffs) rarely see the coverage disputes happening behind the scenes.

These disputes are so common, that the Ontario Government has even created a standard form when it comes to auto disputes between car insurers; and has created legislation dealing specifically on that topic


Notice to Applicant of Dispute Between Insurers

This notice is to inform you that the insurer to whom you have applied for accident benefits claims that another insurer is responsible for paying these benefits. You may be required to assist the insurers in resolving their dispute by providing them with any information that may be needed to determine which insurer should be paying your accident benefits claim.

Very few people read the fine print when they receive the Notice to Applicant of Dispute Between Insurers. But the whole idea that your case is being transferred from one insurer, to another insurer, is quite daunting. It’s not nice getting rejected, or feeling like your life is being passed on from one large company, to another because nobody wants to deal with you.

This is when you have to keep in mind that while your claim is personal for you; your claim is nothing but a number to the insurance company. It doesn’t matter how large, or how small your claim is. One less claim on the books for the insurer helps their bottom line.

This is where the idea of keys comes into play.

In order to drive a car, you need the keys. Some keys are hard touch keys (like a traditional key, or key fob). Other keys are remote through a cell phone. Either way, the key is the gateway to driving lawfully.

But lawyers and insurers then dive deeper.

How did the drive come to be in possession of those keys?

Were the keys stolen?

Were the keys taken without permission from the owner?linkedin-2-300x300

Was the driver operating the vehicle without the express or passive consent of the owner?

All of these questions are very important towards determining insurance coverage.

If the keys are stolen, or taken without the permission of the owner, the insurer will put up a big fight when it comes to coverage. And, in the vast majority of cases, the insurer will come out on top in terms of denying coverage.

What happens when the keys are taken, unbeknownst to the owner? Let’s say that the owner left his/her keys out on the table; and their teenager takes the vehicle out for a spin and gets into an accident. While there may not have been express consent in taking the vehicle, the consent may have been implied because the keys were out in plain view for any family member to take. The teenager is also a licensed driver under his/her parents policy of insurance, so things won’t get too murky when it comes to insurance coverage.

But there are very murky cases when it comes to implied consent. The cases of driving to the bar, having way too much to drink; and then finding out that your vehicle has been involved in an accident! How did it come to pass that someone got your keys and got into a car accident with your vehicle without you behind the wheel?

The result of these questions on the Plaintiff is delay. Few insurers will admit and accept that their policy has to respond. They will put a Plaintiff and other insurers through the paces to get to the bottom of what happened. Unfortunately for a Plaintiff, all of that investigating takes a lot of time and a lot of money. It’s not uncommon for insurers to spend more money investigating and litigating coverage, than on the actual claim itself.

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