Pipped by the PLUP – The Importance of Considering Ontario’s Automobile Insurance Scheme in Insurance Priority Disputes
OVERVIEW
In its recent decision in Rodriguez-Vergara v. Lamoureux, 2025 ONCA 620, the Ontario Court of Appeal clarified the priority of coverage between the OPCF 44R Family Protection endorsement and a personal umbrella liability policy (PLUP). Ultimately, the Court found that automobile insurance policies, including the OPCF 44R endorsement, will take priority over non-automobile insurance policies, such as a PLUP.
BACKGROUND
The underlying action arose from a motor vehicle accident where the plaintiff was struck by the defendants’ vehicle, suffering injuries as a result. The vehicle was owned by the defendant, Ms. D’Souza, but operated by her daughter, Ms. Lamoureux.
Ms. D’Souza was insured under a standard automobile policy with liability limits of $300,000. She was also insured under a personal umbrella liability policy (PLUP) with limits of $1 Million dollars. The third defendant, Royal & Sun Alliance Insurance Company of Canada (“RSA”) insured the plaintiff under an automobile policy with liability limits of $1,000,000, which included a Family Protection Endorsement (OPCF 44R) providing coverage for accidents involving underinsured motorists.
The plaintiff’s damages were assessed above the limits of Ms. D’Souza’s policy, leading Ms. D’Souza and Ms. Lamoureux to be considered underinsured motorists.
ISSUE ON APPEAL
The parties agreed that Ms. D’Souza’s automobile insurance policy with limits of $300,000 would be the primary responding policy. However, the parties disagreed about whether Ms. D’Souza’s PLUP or the plaintiff’s OPCF 44R would respond next in priority. The wording of the pertinent sections of the OCPF 44R endorsement are as follows:
LIMITS OF COVERAGE UNDER THIS CHANGE FORM
4. The insurer’s maximum liability under this change form, regardless of the number of eligible claimants or insured persons injured or killed or the number of automobiles insured under the Policy, is the amount by which the limit of family protection coverage exceeds the total of all limits of motor vehicle liability insurance, or bonds, or cash deposits, or other financial guarantees as required by law in lieu of such insurance, of the inadequately insured motorist and of any person jointly liable with that motorist.
…
AMOUNT PAYABLE PER ELIGIBLE CLAIMANT […]
7. The amount payable under this change form to an eligible claimant is excess to an amount received by the eligible claimant from any source, other than money payable on death under a policy of insurance, and is excess to amounts that were available to the eligible claimant from
(a) the insurers of the inadequately insured motorist, and from bonds, cash deposits or other financial guarantees given on behalf of the inadequately insured motorist;
Ms. D’Souza’s insurer brought a motion pursuant to Rule 21 seeking a declaration that Ms. Vergara’s OPCF 44R stood in priority to the PLUP. The motion judge determined that the OCPF 44R policy would respond before the PLUP. RSA appealed the decision.
RSA argued that the wording of Section 7(a) of the OPCF 44R policy that any insurance coverage included under s. 7(a) must be exhausted before the OCPF 44R policy can pay out. RSA’s position was that the PLUP was considered “any insurance coverage” and would, therefore, respond second, after Ms. D’Souza’s automobile policy.
FINDINGS OF THE COURT
The Court of Appeal did not accept RSA’s argument, highlighting the special nature of Ontario’s highly regulated motor vehicle insurance scheme. The Court noted that a PLUP is not an automobile policy and, instead, provides excess coverage above limits of certain underlying insurance policies. Notably, the PLUP does not attach to a specific vehicle, unlike the standard automobile policy and OPCF 44R which do attach to a specified vehicle.
The Court agreed with the motion judge’s finding that the OPCF 44R endorsement will respond before the PLUP. The distinction between the PLUP and OPCF 44R was the key factor in determining the priority of the responding insurance policy. The court noted that section 7(a) of the OPCF 44R endorsement provides that:[1]
…amounts available to the claimant from “insurers of the inadequately insured motorist” mean amounts from the total motor vehicle liability insurance or funds in lieu of insurance, not any and all types of insurance such as a PLUP.
The Court confirmed that the motion judge’s reasoning was also supported by the Smith v. Talyor, 2024 ONCA 223, decision which held that the words “insurance in any policy in the name of the eligible claimant” in s.18(a)(ii) of the OPCF 44R included only motor vehicle insurance policies, not an excess liability endorsement under a homeowner’s insurance policy.[2]
The Court further noted that s. 4 of the OPCF 44R makes reference to “the total of all limits of motor vehicle liability insurance” available to respond to claims of inadequately insured motorists. The Court commented that it would “make no sense” that the maximum coverage under s. 4 includes only motor vehicle policies, yet the priority of the OPCF 44R under s. 7 would rank behind any insurance policy available to respond, such as a PLUP.[3]
Ultimately, RSA’s appeal was dismissed.
CONCLUSION
The takeaway from this case is that counsel involved with automobile insurance priority disputes, especially involving OPCF 44R coverage, should be careful to consider whether or not any other responding insurance policies are, in fact, automobile liability policies. The Court of Appeal makes it clear that an automobile liability insurance policy and OPCF 44R endorsement will take priority over non-automobile liability policies, such as a PLUP.
[1] At para 17.
[2] At para 18.
[3] At para 19.