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September 2020

Priority dispute determined by financial dependency

Featured Case Study: TD Insurance and Intact Insurance

Howard Borlack
Howard Borlack,

Eric Boate
Eric Boate,

By Howard Borlack

In TD Insurance and Intact Insurance,1 McCague Borlack LLP's Eric Boate successfully argued that Intact Insurance, not TD insurance, had priority to pay statutory accident benefits to a claimant for personal injuries sustained in an October 30, 2017, motor vehicle accident.

The question before Arbitrator Bialkowski was whom a 17-year-old claimant was principally financially dependent on – the claimant's father (Intact) or the claimant's stepmother (TD). To complicate matters, the claimant was a passenger in the vehicle owned by her stepmother and had recently moved from her biological mother's home to reside with her father and stepmother at the time of the accident.

Background Facts

The claimant was a full-time, high school student, and although she had a G1 licence, she did not own a vehicle or have her own insurance at the time of the accident.

After the accident, the claimant applied for accident benefits through TD, who insured her stepmother. The claimant was not listed as a named insured or as a listed driver on her stepmother's policy.

On the application, the claimant identified her stepmother as "step-parent" and was claiming under the policy as her dependent. This was in contrast to the stepmother's Statutory Declaration where it said the claimant was not financially dependent on her.

Each party retained accountants to analyze all the claimant's expenses and then provided conflicting accounting reports on who the claimant was principally financially dependent on.

...a careful review of financials was required by the arbitrator.

Considering the "back and forth" testimony of who paid for what, along with the competing accountants' reports, a careful review of financials was required by Arbitrator Bialkowski.

Relevant Analysis & Findings

Arbitrator Bialkowski pointed out these findings:

  • Since the claimant was an occupant of the vehicle at the time of the accident, the following rules of hierarchy concerning the priority of payment apply.2
  1. The occupant has recourse against the insurer of an automobile in respect of which the occupant is an insured;

  2. If recovery is unavailable under (i), the occupant has recourse against the insurer of the automobile in which he or she was an occupant; (items iii & iv were left off as they don't pertain to this case).
  • For accidents on or after September 1, 2010, the Ontario Regulation 34/103 defines an "insured person" as follows:

the named insured, any person specified in the policy as a driver of the insured automobile and, if the named insured is an individual, the spouse of the named insured and a dependent of the named insured or of his or her spouse (emphasis added).

  • For accidents on or after September 1, 2010, Ontario Regulation 34/104, defines a "dependant" as follows:

“a person is dependant of an individual if the person is principally dependent for financial support or care on the individual or the individual's spouse.”

One issue of note was the claimant had moved from her mother's residence to her father's. As there was no evidence to suggest that the arrangement was only temporary, this was the claimant's "new normal" at the time of the accident. Therefore, regardless if this arrangement was only a few months old, the relative contributions of her father and stepmother would be ongoing. The accountants retained by both insurers had used a two-month period for analysis and Arbitrator Bialkowski used the average monthly contributions for his calculations.


Based on the claimant being a minor and a full-time high school student, Arbitrator Bialkowski found the claimant to be dependent on her father at the time of the accident.

Furthermore, based on Arbitrator Bialkowski's careful review of reports and calculations of who paid what expenses ongoing (some of which were divided again among the entire household), it was determined the father's contributions were greater (father 64% vs. stepmother 36%). Therefore, based on the hierarchy of priority, (i) applied, which, in turn, meant the claimant was deemed principally financially dependent on the father at the time of the accident. As such, Intact was the priority insurer.

The applicant (TD) received indemnity for previous benefits paid to the claimant and was awarded legal costs.

Read Arbitrator Bialkowski's full decision.

  1. TD Insurance and Intact Insurance, decision 295, June 23, 2020
  2. Insurance Act, Section 268(2)
  3. Statutory Accident Benefits Schedule, Section 3(1)
  4. Miller v. Safeco (1986), 48 O.R. (2d) 451 (H.C.J.) aff'd 50 O.R. (2d) 797 (C.A.).

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