In claims involving a motor vehicle collision, an injured victim typically seeks compensation from the at-fault motorist’s insurance company. When the at-fault motorist’s insurance limits are lacking, you may be able to obtain the shortfall from your own (or, for example, your parents’) auto insurer for “uninsurance coverage” and/or “underinsurance coverage”. The former arises when the “at-fault” vehicle is not insured (e.g. someone was driving without insurance or with a stolen car). The latter arises when your injuries require more compensation than what the at-fault motorist’s insurance limits allow. However, you cannot obtain underinsurance coverage if the at-fault motorist’s insurance policy is equal to or greater in value.
This motion arose as a result of a motor vehicle collision wherein four pedestrian teenagers were struck by a drunk driver after a keg party. Two of the four were tragically killed while the other two, including Ms. Kelly Myers-Gordon, suffered significant injuries. The Plaintiffs sued the at-fault motorist; however, it was later ruled that the drunk driver took the vehicle without consent, meaning that this vehicle was uninsured. Ms. Myers-Gordon was therefore unable to obtain any compensation though this insurer. She sued State Farm Insurance for uninsurance coverage and underinsurance coverage. State Farm Insurance agreed that they were obligated to respond to claims for uninsurance but argued that they were not responsible to respond to claims for underinsurance, as there was an even larger homeowner’s policy that was responding on behalf of the individuals who hosted the keg party.
The Court held in favour of the Plaintiffs. While Ms. Myers-Gordon and her family were obligated to first exhaust the homeowner’s policy before seeking compensation for underinsurance, State Farm Insurance could not escape their obligation to cover the Plaintiffs. Applying basic rules of statutory interpretation, the Court found that the standard contract for underinsurance (otherwise known as OPCF44R family protection coverage) differentiated between coverage and priority. Given the gravity of the Plaintiff’s injuries, State Farm Insurance would be responsible to pay their full policy.