The Motor Vehicle Accident Claims Fund: Payor of Last Resort
The Compulsory Automobile Insurance Act (1979) established a system of insurance for all vehicles on a public highway.
This mandatory coverage includes fault-less coverage under the Statutory Accident Benefits Schedule (“SABS”) and third-party liability coverage should one driver cause injury to another. Third party liability coverage protects you if the damage is within your coverage limits, which by law must be a minimum of $200,000. There are penalties for breaching this statute, as fines for owners, lessees, and drivers who do not carry valid automobile insurance ranges from $5,000 to $50,000. Uninsured drivers also run the risk of license suspension and having their vehicle impounded.
While this system has proven effective, there are still drivers who do not carry valid automobile insurance. As a result, they do not have third party liability coverage and may be unable to compensate other parties should they be injured by the uninsured. This places the plaintiff in a precarious situation, as they may be left undercompensated if the uninsured defendant cannot pay the damage award personally. Uninsured individuals would not have access to SABs either. To fill the gap, the Ontario legislature created the Motor Vehicle Accident Claims Fund (“MVAC Fund”). Known as the “payor of last resort,” the MVAC Fund provides compensation to accident victims who would otherwise be unprotected by insurance coverage. This is imbursed by Ontario Driver’s License premiums, as a portion of the fee is allocated to the MVAC Fund from issuances.
Who Can Apply?
Since the MVAC Fund is the “payor of last resort,” it can only be accessed where there is no other insurer that is available to provide valid coverage, either through third party liabilities, SABs, or underinsurance. In addition, (1) the recipient must live in Ontario, (2) the accident must have occurred in Ontario, and (3) there must be damage over $100.
How to Apply?
The Motor Vehicle Accident Claims Act regulates the Fund and sets out its procedures. There are two types of claims: (1) property and (2) personal injury.
1. Property: If your property, excluding your vehicle, is damaged as a result of a car accident, then you can apply for compensation through the Fund. It is important to note that the Fund does not compensate for damage to vehicles. Claims under $3,000 can be directly advanced through the Fund, without concerning the at-fault driver. However, if it is above this threshold, then you must take legal action against the uninsured or unidentified driver. The max for a purely property driven MVAC Fund action is $10,000 plus interests and costs.
2. Personal Injury: The procedure becomes slightly more complex for personal injuries. If the other driver is known but uninsured, then the claim is against the driver, with an application to the fund for the outstanding compensable award. If the driver is unknown, then Ontario’s Superintendent of Financial Services is added as a defendant and is liable to pay the damages. The max for a purely personal injury driven MVAC Fund action is $200,000 plus interests and costs.
Whenever the identity of the uninsured driver is known, the money that the Fund has paid out must be repaid in full by the uninsured driver. The uninsured driver’s license is suspended until this occurs.
The Fund also has a $100 deductible that is applicable to all payouts. It is also open for the Fund to pay interest and legal costs for claims.
For additional information about the MVAC Fund, contact us today. The experienced personal injury lawyers at Littlejohn Barristers are ready to help with your case.