Priority disputes between auto insurers in Ontario could get “very, very messy” due to the upcoming auto reforms, an insurance defence lawyer said in her presentation to accident benefit adjusters March 26.
Starting July 1, 2026, Ontario’s reforms will convert several mandatory benefits in auto insurance policies to optional benefits, including income replacement, caregiver benefits, housekeeping, and death benefits, among others. Medical, rehabilitation, and attendant care benefits will remain mandatory coverages within the auto insurance product.
Optional accident benefits will only be available to named insureds on the policy, meaning drivers, their spouses, dependents, and other listed drivers in the policy. Claims experts say they expect to see more disputes at the Ontario Licence Appeal Tribunal (LAT) over who is entitled to the benefits.
But layered on top of that is the fact that the priority disputes between auto insurers have not changed, says Julianne Brimfield, a partner at SBA Lawyers.
Under Ontario’s existing priority of dispute regulations, the first auto insurer to receive a claim for accident benefits must pay. And if they aren’t the right insurer, they must work out the priority dispute with another insurer in a separate action later.
However, under Ontario’s proposed auto insurance reforms, it seems claimants can now submit accident benefits applications to more than one insurer, says Brimfield.
“On some policies, it’ll be obvious if someone has access to optionals, because they will be that named insured, that listed driver,” Brimfield said at the Ontario Insurance Adjusters Association (OIAA’s) annual conference in Toronto. “But when it’s not obvious, what do you do?
“They’ve already got an open claim [with another insurer], and now they’re coming to the optional benefits insurer, saying, ‘Actually, I want to submit my [optional benefits] claim to you, because I’m a dependent.’
“What does that insurer do? Do they deny the claim? Do they do more investigation? Do they accept it and start a priority dispute? That’s not clear based on the current rules and regulations.”
Continuing with the example, Brimfield asks what happens next if the optional benefits insurer denies the claim.
“Let’s say you are the second insurer, and you deny that claim,” Brimfield says. “What does that claimant then do? Do they just continue with their first claim? Do they then bring a dispute against the second insurer? And now they’ve got two AB claims open with different insurers?
“There’s really no clear direction on that.”
Brimfield questioned whether this is a first party dispute between a claimant and insurers to be resolved at the LAT. Or is it a priority dispute between insurers?
If it is a priority dispute, insurers first approached with a benefits claim must be ready to notify the optional insurer of a priority dispute within the required 90-day notification period. Brimfield offered a hypothetical scenario in which a claimant receives optional benefits from the first insurer notified under priority dispute regulations, but he or she then switches to the optional benefits insurer.
In this scenario, Brimfield says, the first insurer must make sure it puts the optional benefits insurer on a 90-day notice of a priority dispute. Otherwise, the first insurer won’t be able to recover the money they paid out under the dispute resolution rules.
“There are no changes [to the dispute resolution rules] coming up in July,” Brimfield said. “It still says you only send one application [for benefits]. It still says that the first insurer to receive that application has to pay benefits pending resolution of a dispute about priority.
“And it also says that if you do not send that priority notice within 90 days, you can’t pursue another insurer. So the priority regulation is the only way that insurers right now can recover benefits that they’ve paid to a claimant when priority actually lies elsewhere.
“So what does that mean for insurers? They’re still going to have to do that priority investigation on every single claim. They still have to send that 90-day notice once you see that another insurer is lower on priority than you but has optional benefits.
“Send that 90-day notice to them, because if the [claimant] then changes their mind and decides to go to this other [optional benefits] insurer, and you didn’t send that 90 day notice, you can’t get your money.”