Understanding Uninsured and Underinsured Automobile Coverage

Understanding Uninsured and Underinsured Automobile Coverage

Written By: Dale Orlando

Understanding the availability of Uninsured Automobile Coverage (UAC) and Underinsured Motorist Coverage (OPCF-44R) is essential. These coverages can be a financial lifeline in situations where you’re involved in an accident with an uninsured or underinsured driver. In this blog post, we break down the key aspects of these coverages, including when they come into play, how to make a claim, and important considerations.

Uninsured Automobile Coverage (UAC)

Uninsured automobile coverage is mandatory in Ontario, which means this coverage is part of every Ontario Automobile Policy whether you knew about it or not. Section 5 of the Ontario Automobile Policy, or OAP 1, stipulates the terms and conditions of Uninsured Motorist Coverage.  This type of coverage is accessed when a person is injured in an accident involving a vehicle that was uninsured.  The UAC will pay up to the maximum of the minimum limits of insurance coverage in Ontario, which is currently $200,000.

A UAC claim typically arises from three scenarios:

  1. Negligence of an Uninsured Driver: If you’re injured due to the negligence of an uninsured driver your only recourse to make an insured claim is through UAC provisions in a valid automobile policy.
  2. Hit and Run: In cases where the at-fault driver flees the scene, and their identity is unknown, you can turn to UAC for compensation.
  3. Unauthorized Use of an Insured Vehicle: If an insured vehicle is driven without the owner’s consent, and you’re injured as a result, UAC provisions become crucial.

Under which policy can you claim?

Your eligibility to claim UAC benefits depends on your circumstances:

Occupant of an Insured Vehicle:  If you are an occupant of an insured vehicle, your claim is made to the insurer of that vehicle.

Uninsured Vehicle or Pedestrian:  When you are an occupant of an uninsured vehicle or a pedestrian injured by an uninsured or unidentified vehicle, you can claim from various sources:

  • If you or your spouse own an insured vehicle, your claim is against your auto policy
  • Alternatively, you can claim UAC against
    • the policy on a vehicle of a “dependent relative,”
    • the insurer of a company car (with restrictions),
    • the insurer who provided you accident benefits,
    • or the Motor Vehicle Accident Claims Fund as a last resort.

Notice Requirements for UAC Claims

To successfully make a UAC claim, you must:

  • provide written notice of the claim within 30 days or as soon after as is possible (if the injury or death is caused by an unidentified vehicle, notice must be given within 24 hours, if possible)
  • provide details of the claim including details of the accident and losses within 90 days, or as soon after as possible
  • provide details of other insurance coverage you may have access to

The 1% rule as it applies to UAC

The effect of the Negligence Act makes any at fault defendant liable for 100% of the damages caused by a combination of at fault parties despite their share of liability.

If the injured person can attach at least 1% liability to another motorist that is insured, the UAC is not available. Pursuant to the joint and several liability provisions of the Negligence Act, the injured person may be able to obtain full compensation from the insured motorist. It should be noted, however, that this 1% rule only applies to claims against other motorists. It does not apply to claims against taverns or municipalities for example. In the case of a claim against a non-motorist, the UAC carrier would be treated simply as a joint tortfeasor. If liability was split 75/25 between the uninsured motorist and the tavern, the UAC carrier would pay 75% of the damages and the tavern would pay 25% of the damages.

Underinsured Motorist Coverage (OPCF-44R)

OPCF-44R comes into play when the at-fault driver’s liability limits are insufficient to cover your claim. Unlike UAC, OPCF-44R is not mandatory coverage.  It is an endorsement that is purchased in addition to standard coverage.  Although not mandatory, it is exceptionally rare that an auto policy does not contain an OPCF-44R endorsement.  This coverage follows the insured person, not the vehicle involved in the accident.

How much can you claim?

The OPCF-44R coverage does not stack on top of the available insurance of the driver(s)/owner(s) that negligently caused the accident.  It is accessed to top up the available insurance to the maximum of your third-party liability limits.  For example, if you purchased an auto policy with a 2-million-dollar third-party liability limit and you are injured as a result of the negligence of a driver/owner with a 1-million-dollar policy, your own insurer will stand in the shoes of the negligent driver/owner and is liable to pay up to 1 million dollars in damages in your claim.  In this case, 1 million dollars is the difference between the insurance available via the policy of the at fault driver and your policy.  If you have a 1-million-dollar policy and the at fault driver/owner has a $200,000 policy, you have access to a maximum of $800,000 in available insurance from your own policy via the OPCF-44R coverage.

What happens when the underlying insurance policy of the defendant driver is insufficient to cover the claims of multiple injured parties?  Without access to available OPCF-44R coverage, all of the injured plaintiffs have to share pro-rata in the available insurance of the defendant.  For example, if the at fault defendant has a $1,000,000 policy and there are 4 injured plaintiffs, each with a $1,000,000 claim, each plaintiff will receive $250,000 or 25% of the defendant’s $1,000,000.  If you also have a $1,000,000 third party liability policy, you do not have access to additional insurance limits via your OPCF-44R endorsement since your policy and the defendant’s policy have the same third-party limit.  However, if you have a $2,000,000 policy, there is $1,000,000 available to satisfy your claim from your own insurer.  Therefore, your insurer will pay the additional $750,000 in damages owed to you.  Conversely, if you had an auto policy with a limit of $1.5 million, there would only be $500,000 available to satisfy your claim as the underlying policy had a limit of $1 million.

Who can claim underinsured insurance coverage via the OPCF-44R endorsement?

  • If you have your own auto insurance policy including this endorsement, you can claim under it, regardless of the vehicle you were in during the accident.
  • You can also claim under your spouse’s endorsement.
  • If you are considered a “dependent relative” of someone with OPCF-44R coverage, you may be eligible to claim. OPCF-44R defines a dependent relative broadly as:
    • (a) a person who is principally dependent for financial support upon the named insured or his or her spouse, and who is
      • (i) under the age of 18 years;
      • (ii) 18 years or over and is mentally or physically incapacitated;
      • (iii) 18 years or over and in full time attendance at a school, college or university;
    • (b) a relative of the named insured or of his or her spouse, who is principally dependent on the named insured or his or her spouse for financial support;
    • (c) a relative of the named insured or of his or her spouse, who resides in the same dwelling premises as the named insured; and
    • (d) a relative of the named insured or of his or her spouse, while an occupant of the described automobile, a newly acquired automobile, or a temporary substitute automobile, as defined in the Policy.

The 1% Rule as it applies to the OPCF-44R coverage

The Negligence Act functions in the same way in that any at fault defendant is liable for the full amount of the damages despite degree of fault, however, OPCF-44R can be excluded from payment if other parties with available insurance exist, not limited to motor vehicles.  For example, if a tavern with a $1,000,000 policy is 10% liable for the accident along with an uninsured driver, and you have a $1,000,000 auto policy, your OPCF44-R coverage will not be available to you as you have access to 100% of the tavern’s insurance coverage.

The Standard of Proof for Unidentified Motorist Claims under the OPCF44-R

If you are injured as a result of the negligence of an unidentified driver, you will need evidence of the existence of the unidentified vehicle beyond your testimony.  Your evidence must be corroborated by “other material evidence” of the involvement of the other vehicle.  Other material evidence is defined as:

  • independent witness evidence, other than evidence of a spouse or dependent relative; or
  • physical evidence indicating the involvement of an unidentified automobile. Note that “physical evidence” does not require that the evidence emanate from the other vehicle. So long as the physical evidence “indicates” the involvement of another vehicle, it will suffice.

Notice Requirements for Unidentified Claims under the OPCF-44R

Making a claim under OPCF-44R for accidents involving unidentified vehicles requires more immediate action compared to uninsured vehicle claims. Reporting the accident to the authorities and providing a written statement within thirty days are crucial steps.

Uninsured and Underinsured Coverage

In conclusion, understanding the coverage under the UAC and the OPCF-44R is essential to navigating the complex world of automobile insurance claims effectively. Always consult with an insurance expert or legal professional to ensure you’re making informed decisions in the event of an accident involving uninsured or underinsured drivers.

Dale Orlando


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