Accidents involving special types of vehicles are subjected to a loss transfer regime. Especially for an accident that comes under the Statutory Accident Benefits Schedule (SABS), the Accident Benefits claim can be transferred from the injured person or victims’ first-party insurer to a second-party insurer, one of the insurers of the at-fault vehicle in most cases.
A loss transfer lawyer can help the clients grasp the full extent of the clauses that state clearly the conditions of this transfer. Vehicle insurers often pay no-fault benefits so that they can tackle certain accidents involving their automobiles and have the second party insurers reimburse them. The types of vehicles this policy covers include heavy commercial vehicles, motorcycles, or motorized snow vehicles.
What does the statutory framework say about loss transfer?
Section 275 of the Insurance Act and Section 9 of the Ontario Regulation 664 lay down the principles of loss transfer.
- The Insurance Act states that an insurer bears the responsibility for statutory accident benefits under subsection 268(2). The compensation will be determined according to the degree of fault under the Fault Determination Rules. Each claimant involved is subjected to a USD 2000 deductible under this act. Any dispute regarding loss transfer must be resolved through the Arbitration Act.
- The Ont, Reg 664 says that if a regular vehicle is at fault in an accident involving a motorcycle rider, then the motorcyclist’s insurer would have to be compensated by the car’s insurer. But this can only happen if the first party insurer only covers motorcycles/motorized snow vehicles, not an insurance package that includes other regular vehicles.
- The next part of the same Section outlines the conditions for a heavy commercial vehicle to meet the loss transfer regime. Gross vehicle weight should be over 4500 kg, including load in the form of cargo, occupants, and gas.
How do Fault Determination Rules apply in loss transfer cases?
The quantum of a loss transfer claim can be higher than a standard accident benefits file as such cases entail serious injuries. If conditions regarding the vehicle type are fulfilled, then liability becomes the only factor where a loss transfer lawyer can help navigate possible litigations.
In the context of how the accident took place, the non-Fault Determination Rules case law is fluid. However, Fault Determination Rules are a very rigid set of conditions that usually leave no room for argument. Different categories of collisions are listed with detailed diagrams in the Fault Determination Rules in the Ont. Reg. 668. Yet, arguments can be raised in terms of which rule to apply.
An arbitrator assesses the degree of damage and evidence collected to ascertain which rule to apply and settle such disputes. Section 5 is often used to contest deliverances, but courts have prevented litigations from using it as a loophole.
Arbitration should be commenced within the first two years of making a request for Indemnification. There is no real-time limitation for making a request, but ideally, it should be done as soon as possible since there isn’t any benefit in delaying the process. It is best to remember that benefits paid unreasonably could hamper the loss transfer claim.