No need for damages to be formally quantified before a plaintiff can launch action against own insurer in underinsured motorist case
May 15, 2012 by Canadian Underwriter
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A plaintiff does not need to have damages quantified by settlement or judgment before proceeding with an action against his own insurer under the inadequately insured motorist provision of an auto insurance policy, the Ontario Court of Appeal has ruled.
In Roque v. Pilot Insurance Company, the plaintiff, Fernando Roque, sued his own insurer under the Family Protection Endorsement section of his policy, which provided him coverage against harm caused by an inadequately insured motorist.
Roque was injured by an underinsured motorist in a 1996 motor vehicle accident. He commenced an action against the motorist, claiming $1 million in general damages and $750,000 in special damages, but only learned in May 2002 that the motorist had only $200,000 of coverage.
Roque commenced an action against his own insurer, Pilot, in March 2002, well after the limitation period had expired. His policy stated an action must begin “within 12 months of the date that the eligible claimant or his or her representative knew or ought to have known that the quantum of claims with respect to an injured person exceeded the minimum limits for motor vehicle liability insurance in the jurisdiction in which the accident occurred…”
Roque argued he could not have actually “known” for certain the available insurance under the defendant motorist’s policy was less than that available under his own coverage until Roque’s damages had been quantified by settlement or judgment.
The Appeal Court found, however, that this interpretation would leave the phrase in his policy “ought to have known” without meaning.
“The motion judge noted that [Roque] had medical reports, a DAC [Designated Assessment Centre] assessment report and an economic loss report going back to June 1998,” the court noted in its judgment. “The inevitable conclusion is that the plaintiff’s action against [Pilot] was not brought in time and was properly dismissed.”
The Appeal Court acknowledged that Roque had not learned until well after the limitation period that the motorist was not carrying enough coverage. In this situation, it added, the defendant’s insurer did not comply with its obligations under s. 258.4 of the Insurance Act to inform the plaintiff about the liability limits under the defendant’s policy.
In this situation, the court ruled, “it would be prudent for plaintiffs’ counsel to commence an action against their own insurer and discontinue it later if necessary.”
The full decision can be found at:
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