Ontario’s automobile liability policy is standard. Everyone’s coverage is exactly the same in terms of the basic policy. Included in the coverage is a provision that your own insurance company has to protect you where a driver with no insurance causes an accident and injury. The difficulty is that your own insurance company doesn’t need to pay any more than $200,000 of compensation for your losses where the at-fault driver has no insurance. In many cases, this will simply not be enough to keep you and your family safe.
Fortunately, every standard policy can be augmented with extra endorsements. An endorsement is a “tag-on” to your policy that adds to the basic coverage. One of these add-on endorsements is called the Family Protection Endorsement. It protects you against injury caused by a driver with too little insurance as opposed to no insurance. As long as your third party liability limits are more than that at-fault driver’s coverage, then you can ask your own insurer to make up the difference between your policy and the at-fault driver’s policy.
It may be self-evident however it’s an important point to note that a driver with no insurance is also a driver with inadequate insurance. Accordingly, where you’re hurt by a driver with no insurance you can ask your own insurance company to provide you with coverage up to $200,000 under the uninsured motorist provision of your standard policy and you can also ask your own insurance company to provide you with additional coverage up to the amount of your own third party liability limits as long as you’ve purchased the Family Protection Endorsement.
A recent court case called McGrath v. Arshad considered what happens when more than one person is injured in a car accident caused by a driver with too little insurance.
In many accidents there are multiple people who are hurt. Where the at-fault driver has too little insurance, all of those injured people have to share the third party limits that are available in the at-fault driver’s policy. In the McGrath case one of the injured plaintiffs received $20,000 out of an available $200,000. He then asked his own insurance company to make up the difference and fully compensate him. His own insurance company took the position that they only had to start paying compensation owed in excess of $200,000.
The court stated clearly that your own insurance company has to protect you fully. It stated that the Family Protection Endorsement has to start paying based on the difference between what your claim may be worth and the amount that was available from the at-fault driver’s insurance company for you specifically not for the group.
The decision provides important clarification on the question of how the Family Protection Endorsement works. The Family Protection Endorsement is a vital piece of the puzzle in protecting your family against tragedy caused by a motor vehicle accident. If you haven’t done so, contact your broker or agent to ensure that your policy includes the Family Protection Endorsement.
