A drunk driver crosses the center line. Headlights clash. An explosive head-on collision lights up the night.

Inside the twisted wreckage a father is catastrophically injured. His back is broken.

Four surgeries later, he’s in critical care. Tthe specialists say he’ll never work again.

There are three children under five at home and a young mother doing her best to hold it all together.

The community comes together and raises money. A lot of it. A close friend sets up a trust account.

What happens to the money?

The Insurance Act says the no-fault insurer gets to take credit for any money paid to the injured man. Things like long-term disability benefits, CPP disability benefits, private drug benefits. It gets to subtract the amount the man receives from what it has to pay.

Does the no-fault insurer get to do this with the money that friends and family raised?

No.

The courts in Ontario and the Financial Services Commission agree – “Moneys received by an injured party as a result of private or public benevolence have never been taken into consideration in assessing damages for loss of income or earning capacity.” Boarelli v Flannigan, [1973] 3 O.R. 69, 36 D.L.R. (3d) 42

While the no-fault insurer can’t grab the money or take credit for it, the benefit of the fundraising can be lost if the money isn’t spent carefully. The secret is simple if you know the no-fault rules. If you don’t, you probably need an accident benefits advisor. Call Ted, Chris or Gavin for a free initial consultation.