Court finds insured owner and driver of motor vehicle that killed child were underinsured within the meaning of the OPCF 44R Family Protection Coverage as personal liability umbrella policy which included a standard excess policy form (SPF 7) was not a motor vehicle liability policy within the meaning of s. 1 of the Insurance Act or s. 4 of the OPCF 44R.

Dozens of plaintiffs brought direct and derivative claims following a motor vehicle accident that resulted in the death of one child and injuries to several others. The plaintiffs sought a determination of a question of law before trial:  whether the insured driver and owner of the motor vehicle responsible for the loss were underinsured within the meaning of the OPCF 44R Family Protection Coverage endorsement. The insured driver and owner had an Ontario Automobile Policy and a personal liability umbrella policy (PLUP) that included a standard excess policy form (SPF 7).  It was agreed that the underlying limit of the automobile insurance was $300,000 and the PLUP was an additional $2 million.

The court held that the PLUP was not a motor vehicle liability policy within the meaning of s. 1 of the Insurance Act, nor s. 4 of the OPCF 44R.  The limit of the owner and driver’s motor vehicle liability policy was therefore $300,000 and thus the owner and driver were inadequately insured motorists pursuant to s. 1.5 of the OPCF 44R.  The plaintiffs were entitled to coverage under their respective OPCF 44R endorsements.

Insurance law – Automobile insurance – Umbrella policies – Underinsured motorist – Third parties – Accident benefits – Statutory provisions – Interpretation of policy.

Hugo v. McNorgan, [2025] O.J. No. 3732, Ontario Superior Court of Justice, August 26, 2025, E.M. ten Cate J.

This case involved a vehicle accident that killed one child and injured several others.  The accident resulted in eight lawsuits, with 25 plaintiffs making direct and derivative claims.

The plaintiffs were insured under various policies of automobile insurance.  The policies were in the form of the standard Ontario Automobile Policy (OAP 1) and included OPCF 44R Family Protection Coverage endorsements which provided for standard underinsured automobile coverage.  Section 3 of the OPCF 44R stated that the insurer “shall indemnify” an eligible claimant for the amount that he or she is “legally entitled to recover from an inadequately insured motorist.” Section 1.5 of the OPCF 44R defined “inadequately insured motorist” as the “identified owner or indemnified driver of an automobile for which the total motor vehicle liability insurance obtained by the owner or driver is less than the limit of family protection coverage.”  The plaintiffs were entitled to coverage under their own OPCF 44R where the insureds’ limit of motor vehicle liability insurance was less than the limit of family protection coverage.

The insured driver and owner had an Ontario Automobile Policy and a personal liability umbrella policy (PLUP) that included a standard excess policy form (SPF 7).  It was agreed that the underlying limit of the automobile insurance was $300,000 and the PLUP was an additional $2 million.

The parties sought a determination of whether the insureds were underinsured at the time of the accident. The plaintiffs took the position that the PLUP was neither an owner’s policy nor a motor vehicle liability policy. The insurers took the position that the PLUP, although designed as an excess policy to an underlying automobile policy, was a motor vehicle liability policy because of the wording in the PLUP itself and because it satisfied the definitions of “motor vehicle liability policy” and “Owner’s policy” in s. 1 of the Insurance Act.

The court held that the PLUP was not a motor vehicle liability policy pursuant to the OPCF 44R as it was not part of the standard Ontario Automobile Policy.  Further, the court held that “inadequately insured motorist” excluded any consideration of additional or excess coverage.

The court distinguished other decisions which found that an umbrella policy was a “motor vehicle policy” on the basis that the insurer in those cases had filed an undertaking under s. 226.1 of the Insurance Act. The court rejected the insurers’ position that the inclusion of the SPF 7 language in the PLUP had the same effect as an undertaking pursuant to s. 226.1. of the Insurance Act.  The court held that “the SPF 7 language does not automatically transform the PLUP into an OAP 1 because the PLUP provides excess insurance. The inclusion of the SPF 7 in a PLUP is not equivalent to an undertaking under s. 226.1 of the Insurance Act, a formal undertaking, filed with the Ontario Government, to adhere to the all the necessary requirements of the Ontario automobile insurance scheme.”

As the PLUP was not a motor vehicle liability policy pursuant to the OPCF 44R, the limit of the insured driver and owner’s motor vehicle liability was $300,000 and thus they were “inadequately insured motorists” pursuant to s. 1.5 of the OPCF 44R.

This case was digested by Tricia M. Milne and edited by Steven W. Abramson.  If you would like to discuss this case further, please feel free to contact them directly at [email protected] or [email protected].