Unidentified, (Hit and Run), Uninsured and Underinsured Claims. What is an Accident Victim To Do?

Several weeks ago I arrived home to discover that the passenger door to my wife’s vehicle had suffered a noticeable scrape and dent. She denied any knowledge of how this damage occurred, and we concluded that she was the victim of a parking lot hit and run accident. Vehicle damage was appraised at approximately $1,200.00 and as could be expected, my wife was upset at the thought of having to pay for the necessary repairs. I took the initiative and contacted our motor vehicle accident insurer and confirmed that subject to a $500.00 deductible, they would cover the balance of the repair costs. Further, as a not-at-fault accident there would be no impact on future premiums. For my good deed in saving my wife $700.00, I was awarded one half point. I might have been awarded a full point had I offered to also pay the deductible but suspect that since we have a joint account from which the deductible would be paid, she would have seen through that ruse and would have deducted one half point for my overreaching.

While I hope that this introduction has been mildly entertaining, it does raise a significant issue as to what options exist for an innocent accident victim who is involved in a hit and run collision, or, even if the at-fault driver is identified, it is discovered that they have either no insurance or insufficient insurance to pay for the damages that have been suffered.

Typically, in Ontario if you are injured in a motor vehicle accident, there are two primary sources of compensation. Firstly, whether you are at fault for the accident or not, you are entitled to pursue statutory accident benefits (no-fault benefits) against your own insurance policy or the policy of any other driver involved in the accident. Secondly, if you are not wholly at fault for the accident, you can pursue a claim for compensation from the at-fault driver which is generally paid for by the insurer for the at-fault driver, subject to policy limits. However, if you are the victim of a hit and run accident there is no at-fault driver and no insurer, whom you can identify to collect from. Likewise, even if the at-fault driver can be identified, if that individual does not have insurance coverage, or has insufficient insurance coverage, you may not be able to collect the compensation you are entitled to. In this circumstance, you may be able to pursue any shortfall through the unidentified/uninsured or underinsured accident coverage under your own vehicle policy or the policy of a spouse or someone for whom you are a dependant.

Uninsured/unidentified motorist coverage is statutorily mandated by Section 265 of the Ontario Insurance Act. With this coverage, your own insurer essentially steps into the shoes of the uninsured or unidentified driver and can be made to compensate you for the damages you would otherwise have been entitled to from the at-fault driver. This coverage is limited to a maximum of $200,000.00 and where there are multiple claimants, the $200,000.00 has to be shared. This coverage is not available if you are entitled to recover money under the third party liability section of any other motor vehicle liability policy.

Insureds who are at fault for their own accidents may have a motivation towards dishonesty and claim that the accident was caused by an unidentified motorist. Accordingly, when the statutorily mandated uninsured/unidentified motorist coverage was created, in order to prevent fraud there were procedural steps that an insured must follow after an accident with an unidentified motorist, failing which their claim could be denied. Specifically, a claimant has to report the accident to a police officer within 24 hours of the accident or as soon as practical after that time, must provide a written statement to their insurer within 30 days of the accident or as soon as practical after that date outlining the circumstances of the accident, and a description of the injuries and losses, and produce reports that document the nature and severity of the injuries, and expected duration of recovery or disability. Further, they must make the vehicle involved in the collision available to the insurance company for inspection.

In the event that there is no motor vehicle accident insurance policy from which an innocent accident victim can pursue unidentified/uninsured coverage, then they have recourse to the Motor Vehicle Accident Claims Fund. Again, this coverage is limited to a maximum $200,000.00, and again, if there are multiple claimants, the $200,000.00 is shared amongst them.

In contrast to the circumstance where the at-fault driver is either unidentified or uninsured, what options exist in circumstances where you are involved in a motor vehicle accident with another motorist and your entitlement to fair compensation exceeds the at-fault driver’s, or the unidentified/uninsured insurance coverage? In such circumstance the at-fault motorist would be underinsured with the result that you might not be able to recover all of your damages.

In this event, it is necessary to determine whether there exists any underinsured motorist coverage. Underinsured motorist coverage is not statutorily mandated but is available through an optional endorsement. This coverage is routinely added to most motor vehicle accident insurance policies in Ontario and if purchased, provides a secondary layer of liability coverage from an insured’s own insurer where the third party liability coverage of the at-fault motorist is insufficient to provide full compensation. Underinsured motorist coverage is essentially excess coverage and provides additional coverage to the extent there is a difference between the coverage you purchased under your policy in contrast to the coverage available under the policy of the at-fault driver. For example, if you purchased a policy which has $1,000,000.00 of third party liability coverage and the at-fault driver has only $200,000.00 of coverage, (which is the minimum required by law in Ontario) then the at-fault motorist insurer will pay the first $200,000.00, of your claim and your insurer would cover the balance to a maximum of $800,000.00. If both you and the at-fault driver have the same limits, then you do not have any additional underinsured coverage as no underinsured coverage is available under the Motor Vehicle Accident Claims Fund.

To establish entitlement to either unidentified or uninsured coverage, a claimant must prove, on a balance of probabilities, that the at fault driver could not have been identified or has no insurance. However, when an accident is caused by an unidentified driver and underinsurance coverage is pursued, a claimant must provide corroborative material evidence, by way of independent witness evidence (other than the evidence of a spouse) or physical evidence supporting the involvement of an unidentified automobile. In these circumstances timely investigation of the accident may be critical.

Needless to say, the law with respect to unidentified, uninsured and underinsured motorist coverage, it is a complex and technical area, and it is wise to always consult with a personal injury lawyer at the earliest date possible to ensure that all appropriate and timely steps are taken to maximize full recovery for your injuries and damages.